Rosneft, India Oil Deal Uses Dubai Benchmark

Russia’s Rosneft and India Oil Corp agreed to use the Asia-focused Dubai oil price benchmark in their latest deal to deliver Russian oil to India, three sources familiar with the deal said.

• The decision by the two companies to abandon the Europe-dominated Brent benchmark is part of a shift of Russia's oil sales towards Asia after Europe’s introduction of sanctions on Russian oil.
• Under the new deal, announced on March 29, Rosneft will nearly double oil sales to Indian Oil Corp, two of the sources told Reuters.
• Rosneft would sell up to 1.5mn tons per month, or 11mn bbl/month, including some optional quantities, starting 1 April.
• The new contract includes Urals crude, shipped from Russia's European ports of Primorsk, Ust-Luga and Novorossiysk, and Sokol oil exported from Sakhalin which will be sold at a discount of $8-$10/bbl to Dubai quotes on a delivered basis.
• India was the biggest buyer of Russia's benchmark Urals grade crude in March. Deliveries to India are set to account for more than 50% of all seaborne Urals exports last month, with China in second place.