Indian energy giant Reliance Industries Ltd has signed a deal to purchase at least 6 million barrels of Russian oil for delivery in March 2026. This decision comes amid disruptions in oil supplies from the Middle East due to the conflict in Iran, which has halted transportation through the Strait of Hormuz.
This is reported by Finway
Reasons for Changing Oil Supply Routes
India traditionally imports about 40% of its oil from Middle Eastern countries; however, since early March, the Strait of Hormuz has remained closed. This has forced Indian refiners to seek alternative sources of crude. In this context, Reliance Industries Ltd turned to Russian oil, taking advantage of a temporary 30-day exemption from U.S. sanctions for shipments that were dispatched on vessels as of March 5.
Purchase Terms and Market Trends
The purchased volumes pertain to Russian Urals oil, with prices ranging from a $1 discount to a $1 premium compared to Brent prices. This price flexibility is attributed to market conditions and increased demand amid limited supplies from other regions.
India, which became the largest buyer of seaborne Russian oil after Moscow’s invasion of Ukraine in 2022, began to reduce its purchases in January under pressure from Washington. However, the current situation with the blockage of the Strait of Hormuz has once again made Russian oil crucial for the Indian energy sector.
It is worth noting that the price of Russian Urals oil soared to nearly $91 per barrel on March 9, indicating a rise in demand for this grade amid geopolitical turbulence.
“Reliance purchased shipments of Russian flagship Urals oil at prices ranging from a $1 discount to a $1 premium compared to Brent, one source reported.”