Russian: 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.
IOC and Rosneft renewed their annual oil contract for the second time a year ago. It was signed during Russian President Vladimir Putin’s December 2021 visit to India, months before Moscow launched its military intervention in Ukraine.
It hasn’t been renewed for 2024–25, one of the sources stated.
According to two sources, IOC and Rosneft may still execute a deal if they can reach a pricing agreement, but in the meantime, the Indian company will buy Russian oil on the spot 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 the leading supplier to the world’s third-largest buyer.
The annual oil purchase agreement between IOC and Rosneft stipulated a monthly supply of 1.5 million metric tons (equivalent to 360,000 barrels per day) at a discount ranging from $8 to $9 per barrel compared to Dubai quotes, delivered basis.
IOC, along with other state refiners Bharat Petroleum Corp and Hindustan Petroleum Corp, were in collective negotiations with Rosneft for a yearly contract supplying up to 400,000 barrels per day of oil starting from April 1, as per sources previously briefed to Reuters.
Nevertheless, according to two sources, Rosneft proposed supplying 4-6 cargoes per month, totaling up to 4 million barrels, which fell considerably short of the collective request made by Indian refiners.
Additionally, as per two sources, Rosneft extended an offer of a discount ranging from $3 to $3.50 per barrel compared to Dubai quotes within the term deal, aligning closely with rates obtainable in spot markets.
IOC, Rosneft, HPCL, and BPCL did not provide immediate responses to requests for comment. Rosneft
India has maintained its purchase of Russian oil despite facing obstacles presented by a variety of sanctions.
Nevertheless, Indian state refiners opted not to procure Russia’s light sweet Sokol grade oil during collaborative discussions with Rosneft due to payment issues.
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According to the two sources, IOC is still facing challenges in making payments for three Sokol oil cargoes acquired last year.
