India, the third-largest oil importer and consumer globally, has increased its purchases of Russian oil due to interruptions from traditional Middle Eastern producers.
BPCL has secured crude supplies for August and is actively searching for cargoes for September delivery, Vetsa Ramakrishna Gupta informed analysts following the company’s quarterly earnings.
He noted that the company is receiving proposals from traders for Russian oil cargoes to be delivered in September.
“However, due to recent developments in the crude markets, no one is currently offering any discounts for Russian crude,” he added.
Discounts for Russian Urals crude have recently expanded to over $10 a barrel below dated Brent in Indian ports.
“Although there was a brief period of stability in the markets during June, the recent geopolitical developments have shown us how swiftly they can alter the operational landscape,” Gupta stated, mentioning that suppliers might struggle to deliver some cargoes via Red Sea routes.
The cessation of discounts comes in the wake of rising global oil prices following Houthi attacks on shipping in the Red Sea and renewed disruptions through the Strait of Hormuz due to escalating tensions between the U.S. and Iran, increasing costs for refiners dependent on imported crude.
Elevated crude costs are expected to pressure the profitability of Indian state refiners, which sell fuels at subsidized rates in the domestic market.
Both BPCL and Hindustan Petroleum Corp reported quarterly net losses on Wednesday.
According to Gupta, BPCL, which processes over 800,000 barrels per day of crude, fulfilled 69% of its oil requirements through spot purchases in the June quarter.
