Russia's Rosneft signs deal to boost oil supplies to India

Thursday, Mar 30, 2023

By News Desk

Moscow: Russian energy giant Rosneft announced a deal on Wednesday to ramp up oil sales to India, as Moscow seeks new buyers in the wake of tensions with the West over the Ukraine conflict.

The Kremlin´s decision to deploy its military to Ukraine last February saw Russia´s share of the European market collapse as Kyiv´s allies levied sanctions on the Russian oil sector. Rosneft said in a statement that its CEO Igor Sechin had travelled to India and brokered an agreement with the head of the Indian Oil Corporation.

"Rosneft Oil Company and Indian Oil Company signed a term agreement to substantially increase oil supplies as well (as) diversify the grades to India," Rosneft said in a statement. Rosneft however did not specify the volumes stipulated in the agreement nor its value.

The announcement comes one day after Russian Deputy Prime Minister Alexander Novak said Moscow´s oil sales to India had surged more than twentyfold last year.

India has been the biggest buyer of Russia's benchmark Urals grade crude in March. Deliveries to India are set to account for more than 50 percent of all seaborne Urals exports this month, with China in second place.

Rosneft said that representatives of the two oil companies also discussed the "possibilities of making payments in national currencies," pointing to Russia´s efforts to de-dollarise its economy.

Russia, a major producer and key ally of the OPEC oil cartel, cut crude production by 500,000 barrels per day this month in response to the Western sanctions.

Rosneft earlier this month posted a sharp drop in annual profit in the wake of Western sanctions against Russia.

Meanwhile, Russia and India are also looking at expanding the use of the Northern Sea shipping route that passes through the Artic and which could include the building of processing facilities, Russia's Interfax agency reported.

Alexei Chekunkov, Russia's minister for the development of the Far East and the Arctic, is visiting India and a key issue in his talks with Indian officials was the "reliable and safe" transportation of goods through the Northern Sea Route using Russian and Indian ports, Interfax reported.

"It was especially noted that the cost of delivering a container from Vladivostok to India is a third lower than the cost of shipping a container from Moscow," the news agency quoted a Chekunkov statement as saying. Russia wants the Northern Sea Route - which runs along Russia's northern coastline and is the shortest shipping route between East Asia and Europe - to become a major shipping lane and has invested heavily in infrastructure there. It is not currently used in winter due to thick ice. But spurred on by the warming of the Artic, Moscow plans to begin year-round shipping by end of this year.