A group of Indian state-owned refiners have been involved in discussions for months and have been urged to speed up talks with Russia, Business Standard reported, citing sources in India's petroleum ministry.
Russian oil is typically purchased at spot prices. Therefore, a long-term deal would reduce volatility in Russian oil prices and could help India maintain stable access to Russian crude at lower prices.
Oil prices have fallen over the past six months despite continued violence in the Middle East. While global oil demand growth estimates are being revised downward, India remains the largest economy with steady and growing demand, a source said.
“These factors have strengthened the position of Indian oil buyers in any ongoing negotiations,” the source said.
The development comes just days after it was reported that India's largest private oil company Reliance Industries (RIL) had signed a long-term deal with Russia's state oil company Rosneft to supply record volumes of crude.
Rosneft agreed to supply nearly 500,000 barrels per day of various grades of oil to Reliance, in a deal estimated to be worth about $13 billion a year at current prices, Reuters reported.
The new deal accounts for about half of Rosneft's seaborne oil exports from Russian ports and amounts to 0.5% of global supplies.
Russia is now India’s largest oil supplier, accounting for 40% of the country’s total crude imports. Russian oil exports to India doubled to $45 billion last year, Russia’s special envoy to India Denis Alipov said last week. New Delhi has been increasing its purchases of Russian crude over the past two years despite intense pressure from the West.
New Delhi said its policy was driven by its national interest as the world's most populous country to maintain high economic growth. Indian Petroleum Minister Hardeep Singh Puri said India was ready to continue buying oil from Russia as long as prices and terms were favourable.
