Russia's largest oil producer Rosneft and India's top refiner Indian Oil Corp agreed to use the Dubai oil price benchmark in their latest deal to deliver Russian oil to India, three sources familiar with the matter said.
The decision by the two state-controlled companies to abandon the Europe-dominated Brent benchmark is part of a shift of Russia's oil sales towards Asia after Europe shunned Russian oil following Russia's invasion of Ukraine more than a year ago.
The two benchmarks are dollar-denominated and set by S&P Platts for energy data. European oil majors and traders mainly use a unit of US-based S&P Global, but Brent, whereas Dubai is heavily influenced by Asian and Middle Eastern oil trading.
Rosneft's CEO, Igor Sechin, said in February that the price of Russian oil would be determined outside of Europe as Asia has emerged as the largest buyer of Russian crude since the West imposed progressively tighter sanctions on the export.
Under the new deal, announced on March 29, Rosneft will nearly double oil sales to Indian Oil Corp, two sources told Reuters.
Russian Deputy Prime Minister Alexander Novak said Tuesday that Russian oil sales to India jumped 22-fold last year, but he did not specify the volume sold.
The two sources said Rosneft would sell up to 1.5 million tons (11 million barrels) each month, including some optional quantities, to IOC in the new fiscal year from April 1.
The larger volumes and change in Russian oil pricing highlight closer ties between Moscow and India, which has now become the largest buyer of seaborne crude from Russia.
