NEW DELHI: India’s largest oil refiner-fuel retailer IndianOil has hit the pause button on talks for a term deal for sourcing oil from Russia’s Rosneft amid New Delhi’s efforts to ramp up energy imports from the US with the aim of reducing its trade surplus.
Company chairman A S Sahney said the move was prompted by market dynamics and not any govt pressure. “As of now we are not in active negotiations (with Rosneft) but we are open to it. There is no mandate (to buy from the US). We buy crude based on our need and price competitiveness,” he said on Wednesday after reporting a 50% jump in the March quarter profit at Rs 7,264.8 crore against Rs 4,837.6 crore in the previous corresponding period.
In another development, IndianOil signed a five-year gas contract valued at about $1.4 billion with global energy trader Trafigura for LNG at prices benchmarked to Henry Hub (US rates), raising the possibility of shipments from America.
Sahney said any crude has to fit into the company’s rigorous optimisation model which looks at producing the fuel that market wants from the most economically available source. “This is not a good time for term deals…”, he added, alluding to the ever-changing geo-political situation involving Russia and abundance of cheaper barrels from elsewhere.
The share of Russian oil in the bouquet of crudes processed by IndianOil stood at 22% in 2024-25 against 31% in 2023-24. The decline, Sahney said, had started much before the fresh sanctions imposed on Russian oil and shipping sectors by the Trump administration. IndianOil continues to buy Russian crude through tenders, something he said, will continue if prices suit the company.
Sahney declined to say whether the gas contract with Trafigura had any condition of supplies from the trader’s US portfolio. The contract envisages sourcing of 2.5 million tonnes of LNG divided in 27 shipments, beginning second half of the current fiscal.