Bharat Petroleum Shifts Crude Sourcing From Russia to Middle East

Bharat Petroleum Corporation Ltd (BPCL) is reducing its crude oil imports from Russia for November, shifting its procurement toward the Middle East. Vetsa Ramakrishna Gupta, BPCL's director of finance, stated that West Asian grades have become more commercially viable as high freight costs and unattractive premiums eroded the economic advantage of long-haul Russian shipments.

In the July-to-September quarter, Russian crude accounted for approximately 37% of BPCL's sourcing mix, followed by Saudi Arabia at 19% and Abu Dhabi at 17%. This shift reflects a broader trend among Indian refiners who are favoring Persian Gulf suppliers. For example, Iraqi cargoes are currently offered at discounts exceeding $25 per barrel relative to the Dubai benchmark, while Russian oil has been offered at a premium.

BPCL may increase Russian purchases for December cargoes, as premiums have narrowed to $1-$2 per barrel from a range of $12-$13 in October. The company also noted increased competition for Russian crude from China, which has shifted its sourcing after losing access to Iranian oil.

Beyond crude procurement, BPCL announced planned maintenance shutdowns at its Mumbai and Kochi refineries. The company also intends to dilute at least a 30% stake in a proposed refinery and petrochemicals project in Andhra Pradesh and has diversified its LPG and LNG spot purchases from the United States, Oman, and West Africa.