India's Reliance Industries has signed a one-year contract with Rosneft to purchase at least three million barrels of petroleum per month using Rubles.

This shift in payment method follows Russian President Vladimir Putin's call for Moscow and its trading partners to find alternatives to the Western financial system to facilitate trade and circumvent US and European sanctions.

The terms of the contract with Rosneft help the private company Reliance secure its needed petroleum at discounted rates despite OPEC+ supply constraints.

The OPEC+ group, which includes OPEC and its allies such as Russia, is scheduled to discuss production cuts at its June 2nd meeting.

India, the world's third-largest petroleum importer and consumer, has become the largest buyer of seaborne Russian petroleum since the start of the Ukraine war and the subsequent halt of Russian petroleum purchases by the West, coupled with extensive US and European sanctions against Moscow over the war. India has also paid for Russian petroleum in rupees, UAE dirhams, and Chinese yuan.

Meanwhile, Indian state refiners have turned to the spot market to purchase Russian petroleum because they have been unable to finalize contractual purchases of Russian petroleum this year.

A Russian company, while declining to comment on confidential agreements with partners, told Reuters that India is a strategic partner of Rosneft. Cooperation with Indian companies includes projects in petroleum production and refining, and trading of petroleum and petroleum products.

Rosneft also stated that the commercial approaches to valuing the petroleum sold are the same for all companies, regardless of whether they are private or state-owned.

According to informed sources, under this contract, which became effective from the start of India's fiscal year on April 1st, Reliance buys two cargoes of one million barrels of Urals oil each and has the option to purchase four additional cargoes each month at a three-dollar discount per barrel relative to the Middle Eastern benchmark price.

Additionally, this refiner, which operates the world's largest refinery complex, will buy two cargoes of low-sulfur crude oil, particularly the ESPO grade, from the Kozmino port each month at a rate of one dollar per barrel above the Dubai petroleum price.

According to Reuters, Reliance has agreed to pay for Russian petroleum using Rubles through India's HDFC Bank and Russia's Gazprombank.