Bharat Petroleum Corporation Ltd (BPCL) expects its Russian crude oil purchases to decline in November as higher freight costs and less attractive offers make Middle Eastern grades more commercially viable, a company executive said on Monday.
Vetsa Ramakrishna Gupta, BPCL’s head of finance, told analysts following the company’s quarterly earnings announcement that Russian crude cargoes for November had been significantly reduced due to rising freight costs and the improved economics of sourcing oil from the Middle East.
Russian crude accounted for around 37% of BPCL’s crude sourcing mix during the July–September quarter. The company said supplies from the Middle East had increased compared with the first quarter and that it expected higher volumes from the region in October and November.
India’s imports of Middle Eastern crude surged in September, returning to pre-war levels, while refiners reduced Russian oil purchases amid stiff competition from China, according to ship-tracking data.
However, the price premium on Russian crude has narrowed significantly. BPCL said premiums for Russian cargoes scheduled for December had fallen to around $1–$2 per barrel, compared with $12–$13 per barrel for October cargoes.
BPCL also cautioned that refinery runs could moderate in the third and fourth quarters due to planned maintenance. Some units at its Mumbai refinery are scheduled for a 30-day shutdown, while certain units at its Kochi refinery will undergo a maintenance turnaround lasting 30–40 days.
Separately, the company said it plans to dilute at least a 30% stake in its proposed refinery and petrochemicals project in Andhra Pradesh.