Russia and India sign oil supply deal, see need for stable prices in talks
Russia and India signed Dec. 6 new energy cooperation agreements including a contract for Rosneft to ship almost 15 million barrels of crude to the world’s third-largest consumer of oil in 2022, according to government and company statements.
Both countries also acknowledged the importance of dialogue between consumers and producers to ensure stable energy prices. S&P Global Platts assessed Dated Brent has gained 43% year-to-date to trade around $70/b in early December despite continued concerns over the COVID-19 pandemic.
“The signing of a new oil supply contract confirms the strategic nature of the long-term partnership between Rosneft and Indian Oil,” Rosneft CEO Igor Sechin said, according to a company statement.
Russia’s largest crude producer said it has agreed a contract to ship up to 2 million mt, or around 14.66 mil barrels, of crude by the end of 2022. Deliveries will be shipped via the Russian Black Sea port of Novorossiisk, the company said.
Rosneft’s owns a 49.13% stake in the Indian company Nayara Energy, which owns the 20 mil mt/year Vadinar oil refinery.
The Kremlin also said both countries acknowledged the important role of dialogue between consumers and producers.
“India highlighted the need for responsible and informed market pricing of global energy supplies. Both sides noted the importance of dialog between consumers and producers to stabilize energy prices.”
On the visit to India by President Vladimir Putin both sides “reaffirmed their commitment to increasing Russian crude oil production under long-term contracts at preferential prices, and increasing LNG imports to India with the possible use of the Northern Sea Route for energy supplies.”
Russia and India cooperate extensively on energy, including Indian companies’ stakes in Russian upstream projects Sakhalin 1, Vankorneft and Taas-Yuryakh.
“The parties also agreed to consider prospects for expanding cooperation on hydro and thermal energy, energy efficiency, and the use of renewable energy sources.” the Kremlin said.
Continuing joint work on developing payments in national currencies to reduce costs, time and risks associated with payments was also discussed. Interest in non-dollar payments including for energy resources has increased in Russia in recent years, due to the risk that Western sanctions may restrict Russian companies’ access to the dollar in future.