Russia’s largest oil producer, Rosneft, and India’s largest refinery, Indian Oil Corp, have agreed to use Dubai’s Asian-focused oil price benchmark.
The decision by the two state-owned companies to drop the Brent brand is part of the elimination of Russian oil sales to Asia. This is happening against the backdrop of Europe’s refusal of Russian oil.
Both are dollar-denominated and set by S&P Platts, a division of US S&P Global Inc, but Brent is mainly used by European oil companies and traders, while Dubai is heavily influenced by Asia and the Middle East.
Rosneft CEO Igor Sechin said in February that the price of Russian oil would be determined outside of Europe as Asia became the largest buyer of Russian oil. Under the new deal, which was announced March 29, Rosneft will almost double oil sales to Indian Oil Corp.
Recall that India was the largest buyer of Urals offshore oil in March, and the country’s demand for this grade means that Russia must maintain high export volumes.
Sales of Russian oil to India increased 22 times last year. The country became the largest importer.
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