India, 31/12/2024: Bharat Petroleum Corporation Ltd (BPCL), an Indian state-owned oil refiner, is buying more oil from the Middle East because it is getting less of the cheaper Russian oil it used to rely on. BPCL’s finance head, Vetsa Ramakrishna Gupta, said the company is missing two to three shipments of Russian oil each month. To fill this gap, BPCL is purchasing oil from countries like Oman. At present, Russian oil makes up about 35-37% of the crude processed at BPCL’s three refineries, which can handle a total of 706,000 barrels per day.
India started buying a lot of Russian oil after the European Union stopped due to sanctions following Russia’s invasion of Ukraine in 2022. Russian oil, sold at lower prices, now makes up more than one-third of India’s total oil imports. However, Indian refiners, who usually buy oil through short-term deals, are finding it hard to get 8-10 million barrels of Russian oil for January, according to industry reports.
Russian oil exports have decreased because of higher demand within Russia and its deal with OPEC to cut production. On top of this, Rosneft, Russia’s state-owned oil company, has made a long-term deal to supply 500,000 barrels per day to India’s private refiner Reliance starting in 2025. This deal will use up nearly half of Rosneft’s export supply, leaving less oil for other buyers like BPCL.
BPCL is finding new sources of oil to handle these challenges. Around 53% of its oil comes from long-term deals, and it recently bought oil from Argentina for the first time. For the 2025/26 financial year, BPCL plans to buy 10,000 barrels of oil per day from Qatar through an annual deal while keeping its other supply agreements. Gupta also said that if Russian oil supplies drop more, BPCL will look at other options like West Texas Intermediate (WTI) crude or more oil from the Middle East, choosing whichever is cheaper.
