Russian Oil
Russian Oil: Due to their inability to reach a price and volume agreement, Rosneft and Indian Oil Corp have not renewed their oil supply agreement, which ended in March. As a result, India’s largest refiner has been forced to turn to spot markets, according to three people with knowledge of the situation who spoke on Monday.
A year ago, IOC and Rosneft extended their yearly oil contract for a second time. Months before Moscow’s armed intervention in Ukraine, it was first inked in December 2021 at Russian President Vladimir Putin’s visit to India.
State-run IOC’s term contract with Rosneft expired on March 31, two sources said.
“The deal for 2024-25 has not been renewed,” said one of the sources.
According to two of the individuals, if terms can be worked out, IOC and Rosneft may still execute a contract, but in the interim, the Indian company would purchase Russian oil on the open market.
After Western countries boycotted imports and put sanctions on Moscow over its invasion of Ukraine, New Delhi has been gorging on discounted Russian oil, with Russia becoming as the leading supplier to the world’s third largest buyer.
Monthly supply of 1.5 million metric tons (360,000 barrels per day) at a discount of $8–9 per barrel to Dubai quotes on a deliverable basis was made possible by IOC’s annual oil purchase arrangement with Rosneft.
Beginning on April 1, sources previously told Reuters, IOC and other state refiners Bharat Petroleum Corp and Hindustan Petroleum Corp were jointly negotiating with Rosneft for up to 400,000 barrels of oil per day under an annual contract.
But according to two of the sources, Rosneft offered to supply 4-6 cargoes per month, or up to 4 million barrels overall—much less than what the Indian refiners had collectively asked.
Additionally, according to two sources, Rosneft had given Dubai quotes under the term arrangement a discount of $3–$3.50 per barrel, which was comparable to prices seen in spot markets.
India has continued to buy Russian oil despite problems posed by a raft of sanctions.
However, because to payment issues, Indian state refiners chose not to hoist Russia’s light sweet Sokol grade oil during joint talks with Rosneft.
IOC is still struggling to make payment for three Sokol oil cargoes purchased last year, the two sources said.