As part of India’s strategy for diversifying the country’s crude oil supplies from non-OPEC countries, India will now import crude oil from Russia for the year 2020. Indian Oil Corporation Limited has signed a contract with Russia’s Rosneft for importing 2 million metric tonnes of Urals grade crude oil in a bilateral meeting.
According to the Ministry of Petroleum & Natural Gas, the addition of Russia as a new source for crude oil imports by India’s largest refiner will go a long way in mitigating the risks arising out of geopolitical disruptions. The new arrangement is expected to result in price stability, the oil ministry said.
Not just better prices but the agreement will ensure energy security for India as well, said the Ministry of Petroleum & Natural Gas. According to the ministry, India is witnessing robust growth in demand for petroleum products and the recent agreement will also open up the avenues for other PSU oil refiners to enter into similar term contracts for import of Russian crude oil.
Four Indian oil and gas Public Sector Undertakings (PSUs) have already submitted the Expression of Interest to Rosneft for importing oil. “In order to negotiate the terms of Indian companies entering Vostok Oil in the shortest time possible, it was agreed to create a working group of representatives of Russian and Indian companies,” said the Ministry of Petroleum & Natural Gas.