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India’s state-run refiner Bharat Petroleum Corp. is recalibrating its crude import strategy almost daily and ramping up spot purchases after the US-Israeli conflict with Iran disrupted Middle East supplies, Chairman Sanjay Khanna said on Tuesday.
India, the world’s third-largest oil importer and consumer, has been hit by rising crude prices and supply disruptions following the closure of the Strait of Hormuz. The South Asian nation has raised the retail prices of petrol and diesel twice in a week.
The refiner had planned to source about 55% of its crude requirement for 2026/27 through annual contracts, mainly from Middle Eastern producers, and the rest through spot markets.
But force majeure declarations by some Gulf suppliers have pushed Bharat to increase spot buying to keep refineries running at 115% capacity, Khanna said.
”Definitely, our spot volume has gone up considerably in recent times because of all the uncertainty.”
Bharat operates three refineries in India with a capacity to process 706,000 barrels per day of oil.
The state-run refiner meets 40%-45% of its crude needs with Russian oil bought largely in the spot market after Washington granted sanctions waivers, Khanna said, although discounts have narrowed sharply.
Discounts on Russian crude have fallen to $5 to $6 per barrel to dated Brent on a delivered basis from $10 to $12 earlier, finance director Vetsa Ramakrishna Gupta said.
Despite recent fuel price hikes, BPCL continues to incur a revenue loss of 25 to 30 rupees (26 to 31 US cents) per litre on diesel and 10 to 14 rupees per litre on petrol, Gupta said.
BPCL expects spot purchases to ease if Saudi Arabian contracted supplies improve after the restoration of the Kingdom’s east-west pipeline capacity.
Saudi Arabia is currently giving only ”a small commitment” for supplies through the pipeline, Gupta said.
BPCL is also evaluating annual supply deals with new producers for next year if they offer flexible delivery terms and competitive pricing, although the company prefers sourcing from nearby regions over distant suppliers such as Venezuela and Canada.
The refiner also has an optional annual crude purchase arrangement with Brazil.
India, the world’s third-largest oil importer and consumer, has been hit by rising crude prices and supply disruptions following the closure of the Strait of Hormuz. The South Asian nation has raised the retail prices of petrol and diesel twice in a week.
The refiner had planned to source about 55% of its crude requirement for 2026/27 through annual contracts, mainly from Middle Eastern producers, and the rest through spot markets.
But force majeure declarations by some Gulf suppliers have pushed Bharat to increase spot buying to keep refineries running at 115% capacity, Khanna said.
”Definitely, our spot volume has gone up considerably in recent times because of all the uncertainty.”
Bharat operates three refineries in India with a capacity to process 706,000 barrels per day of oil.
The state-run refiner meets 40%-45% of its crude needs with Russian oil bought largely in the spot market after Washington granted sanctions waivers, Khanna said, although discounts have narrowed sharply.
Discounts on Russian crude have fallen to $5 to $6 per barrel to dated Brent on a delivered basis from $10 to $12 earlier, finance director Vetsa Ramakrishna Gupta said.
Despite recent fuel price hikes, BPCL continues to incur a revenue loss of 25 to 30 rupees (26 to 31 US cents) per litre on diesel and 10 to 14 rupees per litre on petrol, Gupta said.
BPCL expects spot purchases to ease if Saudi Arabian contracted supplies improve after the restoration of the Kingdom’s east-west pipeline capacity.
Saudi Arabia is currently giving only ”a small commitment” for supplies through the pipeline, Gupta said.
BPCL is also evaluating annual supply deals with new producers for next year if they offer flexible delivery terms and competitive pricing, although the company prefers sourcing from nearby regions over distant suppliers such as Venezuela and Canada.
The refiner also has an optional annual crude purchase arrangement with Brazil.
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