Oil PSU refineries in talk with Rosneft to secure Russian crude for long term

Three oil major PSU refineries are willing to take a step forward to initiate talks with Russian oil supplier Rosneft Oil Company PJSC to secure long-term supplies of Russian Crude. Around total of 500,000 barrels per day of Russian crude supplies are estimated to be figured out for the contract.

Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation are currently deliberating to buy crude oil but the matter has not been concluded as the buyers are seeking clauses to protect them from exits and penalties as of payment issues delay. India is considered to be the world’s third largest crude importer which is mostly dependent on Middle Eastern nations for its supply of feedstock.

 

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Indian Oil signed its first term contract with Rosneft in 2020 as part of the country’s effort to diversify its crude supply. The deal was fruitful in 2022 with both companies agreeing to substantially increase flows in 2023. While BPCL and HPCL don’t have existing long-term contracts with Rosneft.

 

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Before the war of Russia-Ukraine began, Russian oil accounted for only 2% of India’s total oil imports behind only Iraq, Saudi Arabia, and the UAE. After the commencement of the war, the USA-led sanctions on Russia have offered big discounts on oil, up to $30 per barrel, unleashing a major amount of oil supply in India. Currently, Russia accounts for 40 percent of the oil supply demands of the country.

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