Russia and India are committed to the development of Russian oil exports to the latter. Indeed, the Russian oil giant Rosneft has signed an agreement with an Indian partner to increase Russian oil supplies to India. This announcement comes at a time when Russia is seeking to redirect its sales to Asia because of the embargoes on its hydrocarbons imposed by the West.
A forward agreement from Russia to diversify grades to India
During a trip to India by its boss, Igor Setchine, Rosneft signed a contract with the Indian Oil Company to significantly increase oil supplies and diversify grades to India. However, the amount of the contract signed and the volumes decided under this agreement were not specified by Rosneft.
Russia redirects oil exports to India and Asia to make up for lost markets in Europe
Faced with the loss of certain markets in Europe, Russia has turned to Asia to compensate for this decline in activity. Indeed, new outlets have allowed Moscow to reduce its dependence on Europe. However, this new orientation towards Asia is not without consequences, as it leads to an increased dependence on Asian heavyweights, particularly China and India.
Despite these new outlets in Asia, Russia remains dependent on these trading partners, who have the opportunity to negotiate prices downwards. This represents a difficulty for Russia, which must find solutions to maintain satisfactory margins while maintaining balanced trade relations with these Asian countries.
Russia seeks to de-dollarize its economy
Faced with this situation, Russia is seeking to de-dollarize its economy to be less dependent on Washington. Thus, Rosneft has specified in a statement the possibility of making payments in national currency. This is part of a broader policy of de-dollarization of the Russian economy, aimed at strengthening its independence from the United States.
India, Russia’s new trading partner for oil exports
In this strategy of diversifying its trade partners, Russia has found a strong ally in India. Indian companies are partners of Rosneft in several of its major projects in Russia, including the development of the Vankor oil and gas field. In 2022, Russia even became one of India’s top five trading partners for the first time, with a trade volume of $38.4 billion.
This cooperation between Russia and India is expected to continue and strengthen in the coming years, offering new growth opportunities for both countries.
