On Wednesday, Indian Oil Minister Dharmendra Pradhan said that state-run Indian Oil Corp. (IOC) had signed a crude purchasing deal with Russian oil major Rosneft as India is diversifying its source of crude.
Under the contract, IOC would buy 2 million tonnes or 40,000 bpd of Urals crude from Rosneft this year. This contract is IOC’s first contract with Rosneft.
Typically, Indian refiners would buy Russian oil via the spot market compared to contract as the freight costs could exceed those of suppliers from the Middle East. An IOC source said that the company will buy Rosneft oil under the annual deal whenever the price is low enough to offset for freight cost.
After a meeting with Igor Sechin, Rosneft’s chairman, Pradhan said that Sechin is ready to work with Indian oil and gas firms to secure the country’s energy security. They also discussed Indian investments in Russia.
