Reliance Industries set to buy Russian crude oil in Roubles

A recently published in a prominent Indian media outlet states that Reliance Industries has agreed to purchase up to 3 million barrels of oil per month from Russian state owned oil company Roseneft, and make payments in Roubles. It is understood that this measure has been taken because of US sanctions against various Russian entities due to the ongoing conflict in Ukraine.

As per the report, HDFC Bank might be facilitating the payment from India with Gazprombank completing the formalities in Russia.

The purchase terms as per the report would be Urals crude at a $3 discount on Middle East Dubai benchmark, and low sulfur ESPO blend loaded from Russias Pacific port at a 1$ premium on the Middle East Dubai benchmark rates. Overall the purchase terms seem to be for 3 million barrels per month, with an option to take the purchases to up to 7 million barrels per month. The deal has been signed for 1 year time period.

Reliance Industries owns the worlds largest single refining complex situated at Jamnagar, Gujarat. It has the capacity to refine and process above 60 million metric tons of crude oil per annum (This is roughly equivalent to around 420 million barrels of crude oil per annum, or 1.2 million barrels per day)

Indian state owned oil companies have been regular purchasers of crude oil from Russia and Russian linked entities, and there are various ongoing joint venture and coordinated operations in the upstream space.

However given the public anguish against the ongoing war in Ukraine, where Russia is commonly held to have played the role of the aggressor, and the United States and NATO tacit as well as overt support to the Ukrainian national army suggests that Washington is not likely to overlook transactions designed to circumvent its sanctions. A spokesperson in Washington has recently commented that they were aware and not perturbed by continuing Indian purchases of Russian oil; public opinion might be another matter.