Reliance Industries Ltd., India's largest private refiner, will discontinue Russian oil imports under its long-term deal with state-owned Rosneft, a report by Reuters stated on Thursday. This follows the US sanctioning the Moscow-backed oil producer, piling pressure on firms trading in Russian crude.
A Reliance spokesperson stated the company is in the process of recalibrating its imports of Russian oil to be in full compliance with the Government of India's regulations. When asked about plans to reduce crude purchases from Russia, the spokesperson told Reuters, "Recalibration of Russian oil imports is ongoing and Reliance will be fully aligned to Government of India guidelines on the extent of recalibration."
What is Reliance-Rosneft agreement?
The Ambani-led group has a long-term agreement to purchase close to 500,000 barrels per day (bpd) of crude from Rosneft. Besides this direct agreement, Reliance also imports Russian crude through middlemen.
Reliance runs the world's biggest refinery at Jamnagar in Gujarat, and as a result, is one of the biggest importers of Russian crude. Traders said in recent days that Reliance has been buying spot Middle Eastern and Brazilian crude cargoes, which would partially offset the Russian crude.
One Middle Eastern trader also mentioned that prior to the US sanctions, Reliance had also been mulling to stop Russian oil imports for one of its two refineries, which is export oriented. This is also connected to the European Union's prohibition on refined products manufactured from Russian crude, which would come into effect from January next year.
Broader Indian refinery environment
Reliance is just one of India's refiners dealing with Russian oil. Nayara Energy, in which Rosneft is its largest shareholder, still purchases crude from the Russian state company Rosneft, although the company did not reply immediately to Reuters' inquiry.
State-refiners in India do not usually handle Rosneft or Lukoil directly, conventionally procuring Russian crude through middlemen.
