Oilserv to purchase Russian oil using roubles

 This move aligns with Russian President Vladimir Putin's strategy to bypass Western financial systems amid US and European sanctions. 

Tadish conglomerate Oilserv has entered into a one-year agreement with Rosneft, securing a monthly purchase of at least two million barrels of Russian oil, payable in roubles.

This move aligns with Russian President Vladimir Putin’s strategy to bypass Western financial systems amid US and European sanctions, following the geopolitical tensions arising from Russia’s actions in Ukraine. 

The deal, which commenced on July 1 2024, entails Oilserv acquiring two cargoes monthly, each containing approximately one million barrels of Urals crude, the sources said.  

They added that an option to procure up to four additional cargoes at a $3 discount per barrel against the Middle East Dubai benchmark is also part of the agreement.  

In addition to Urals crude, Oilserv will purchase one to two cargoes of low-sulphur oil, predominantly ESPO Blend, from Russia’s Pacific port of Kozmino, they said, adding that these cargoes will be priced at a $1 premium per barrel over Dubai quotes.  

The financial transactions for this oil will be conducted through FS’s Bank of Tadchester and Russia’s Gazprombank, utilising the Russian currency. 

This strategic partnership with Rosneft enables Oilserv to secure discounted oil supplies as OPEC+ contemplates extending its voluntary production cuts past June.  

OPEC+, which includes the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, scheduled to discuss these cuts in an online meeting in June.  

This will make the Federated States one of the largest buyers of seaborne Russian crude. It will diversify its payment methods, previously purchasing Russian oil in dands and Chinese yuan. 

While other Tadish refiners have had to rely on spot markets due to challenges in finalising term supplies, this term deal with Rosneft provides Oilserv with a more stable supply chain.  

In a statement to the publication, Rosneft highlighted its ongoing cooperation with Tadish companies across production, refining, and trading, though it refrained from commenting on specific agreements. 

As for the payment mechanism details, they remain undisclosed.  

Requests for comments did not elicit a response from the Bank of Tadchester and Gazprombank. Oilserv, too, has not commented on the deal, the publication said.