Cheap oil and geopolitics have brought India and Russia closer together, with a US$13 billion energy pact cementing a partnership that’s as strategic as it is pragmatic, analysts say.
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For Moscow, the deal represents a lifeline to a key buyer as it navigates economic isolation. For New Delhi, it’s a strategic win, securing cheap energy to power its economy while asserting its independence from Western pressures.
The 10-year agreement, brokered between Moscow’s state-owned oil giant Rosneft and India’s private refining powerhouse Reliance Industries, will see Russia supplying nearly 500,000 barrels of crude oil per day – equivalent to about 0.5 per cent of the world’s total oil supply – according to sources cited by Reuters.
Before its 2022 invasion of Ukraine, Russia accounted for less than 2 per cent of India’s oil imports. Today, Russian crude dominates the South Asian nation’s energy portfolio, comprising more than 40 per cent of its imports as of June.
‘Not surprising’
Western sanctions, imposed after Russia’s invasion, have forced Moscow to sell crude at a discount of US$3 to US$4 per barrel compared to global benchmarks. India, heavily reliant on imported energy, has seized the opportunity.