Reliance Industries Strikes Deal with Rosneft for Rouble Payments

Reliance Industries, India’s major refining company, has inked a significant agreement with Russia’s Rosneft. Under this deal, Reliance will purchase at least 3 million barrels of oil per month from Rosneft, paying in Russian roubles. This move aligns with Russian President Vladimir Putin’s call for alternative trading mechanisms amid Western sanctions. Additionally, the agreement enables Reliance to secure oil at discounted rates amidst expectations of extended OPEC+ supply cuts.

Key Details

Rouble Payments

Reliance will conduct transactions in roubles, adhering to Putin’s initiative to diversify trade away from the Western financial system.

Strategic Partnership

Rosneft acknowledges India as a strategic partner, involving collaboration in production, refining, and trading of oil and petroleum products.

Deal Terms

The agreement, effective from April 1st, entails Reliance purchasing Urals crude and low-sulphur crude, with specified discounts and premiums relative to benchmark prices.

Payment Mechanism

Reliance will utilize HDFC Bank in India and Gazprombank in Russia for rouble-based payments. Further details on the payment process are yet to be disclosed.

Implications and Outlook

Reliance’s shift to rouble payments underscores geopolitical shifts in energy trade dynamics and signifies deeper economic ties between India and Russia. The deal secures Reliance’s oil supply while providing benefits amidst global market fluctuations and geopolitical tensions.

Piyush Shukla

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