Indian Oil Corporation (IOC) on Wednesday signed a deal to raise oil imports from Russia's Rosneft as it looked to capitalise on the discounted oil available post Ukraine war. "Rosneft Oil Company and Indian Oil signed a term agreement to substantially increase oil supplies as well as diversify the grades to India," the Russian firm said in a statement.
It did not indicate the volumes. IOC had in December 2021 signed a deal to buy up to 2 million tonnes of crude oil from Rosneft in 2022. Rosneft said the deal was signed during the visit of company's chief executive Igor Sechin to India. "Igor Sechin, CEO of Rosneft Oil Company, and Shrikant Madhav Vaidya, Chairman of Indian Oil Corporation Ltd, signed the agreement, in the presence of India's Minister of Petroleum and Natural Gas Hardeep S. Puri," the statement said. "The parties also discussed ways of expanding cooperation between Rosneft Oil Company and Indian companies in the entire value chain of the energy sector, including possibilities of making payments in national currencies."
Oil from Russia is being sold at a discount after some buyers in the west shunned it after Moscow invaded Ukraine. India, which sporadically bought Russian oil prior to February 2022, upped the imports from Moscow. India has been the biggest buyer of Russia's benchmark Urals grade crude in March.
Russia's deputy prime minister on Tuesday said Russian oil sales to India surged more than 20-fold last year. "Igor Sechin, Chief Executive Officer of Rosneft Oil Company, made a working trip to India, during which he met with officials from the Indian government, as well as with the heads of some of the country's largest oil and gas companies," the statement said.
During the talks, the ongoing implementation of joint projects between Rosneft and its Indian partners, including Sakhalin-1, Taas-Yuryakh and Vankorneft was discussed, it said without giving details. "The parties also noted a significant increase in turnover between Russia and India," it said.
According to the latest statistics from the Ministry of Commerce and Industry of India, Russia for the first time in history has become one of the five largest trading partners of India -- the volume of trade between the two countries in 2022 reached $38.4 billion.
"Thus, the goal set by the leaders of our countries to increase turnover to $30 billion by 2025 has been achieved in advance," said the head of Rosneft. Minister Hardeep Singh Puri in a tweet said he "witnessed the signing of a long term agreement between IOC and Rosneft to increase substantial & diversified crude oil supply from Russia to India."
"This Agreement is emblematic of the growing collaboration between the two countries in the energy arena," he said. On his meeting with Sechin, he said the two discussed "special and privileged strategic partnership" between the two nations. "Reviewed the existing areas of cooperation including ongoing implementation of joint projects." "Welcomed the substantial growth in bilateral energy trade and deliberated upon new opportunities of cooperation across the entire energy value chain," he added.
