BPCL buys Middle East crude oil to replace Russian shortfall

BPCL buys Middle Eastern crude due to shortage of Russian oil, plans to diversify sources and invest in expansion.

State-run Indian refiner Bharat Petroleum Corporation Limited (BPCL) is buying Middle Eastern crude to make up for less supply of cheaper Russian oil, its head of finance Vetsa Ramakrishna Gupta said in a recent interview.

State refiners, which typically buy Russian oil in the spot market rather than under long-term contract, are unable to procure about 8 million to 10 million barrels of crude for January, 2025 loading that they have previously seen available in the market, sources said earlier this month.

India became a top buyer of Russian seaborne oil after the European Union shunned purchases and imposed sanctions on Moscow following its invasion of Ukraine in 2022. Russian oil accounts for more than one-third of India's energy imports as the country has sought to take advantage of discounts on the crude.

“BPCL is not getting its full Russian oil supply from the spot market,” Mr. Gupta told Reuters in an interview on Dec. 26.

"There may be a shortage of two to three cargoes per month ... whatever is the shortage of Russian crude, we are purchasing that from Middle East only," he said, adding that its recent purchases included Omani oil.

Russian oil makes up about 35% to 37% of the crude BPCL processes at its three refineries, which have a combined capacity of 706,000 barrels per day (bpd), he said.

"Next year if there is any major impact on Russian supplies, we will explore more sources including WTI (West Texas Intermediate) crude or Middle Eastern crudes, whichever is cheaper," Mr. Gupta said.