Trump Tariff Impact: HPCL Sees 'No Significant Impact' From Not Buying Russian Oil
Russian crude constituted only 13% of HPCL's refining portfolio in the April-June quarter of this year, Kaushal told analysts at a post-earnings call.
Hindustan Petroleum Corp. will not witness any significant impact on its earnings if the threat of secondary sanctions from the US deters crude oil purchases from Russia, Chairman and Managing Director Vikas Kaushal said on Friday.
Russian crude constituted only 13% of HPCL's refining portfolio in the April-June quarter of this year, Kaushal told analysts at a post-earnings call.
"In the first quarter, our share of Russian crude was only 13.2% in our overall portfolio, which was lower than last year. And it's not because of any geopolitical reason. It was economic decisions on what we needed to run in our refineries," he said, informing that HPCL used Russian oil in its Visakhapatnam refinery.
"We found other crudes to be more attractive... it's not that we are not buying Russian crude. Those decisions are still open. It's just that whatever is economical will be bought," the MD said.
The comments came after the US, earlier this week, imposed a 25% tariff on India as a punitive measure for buying Russian crude. That is in addition to the 25% tariffs that Trump had already announced last week. These tariffs would come into effect from Aug. 27. Washington has argued that oil deals with Moscow have fuelled its war in Ukraine and hampered peace efforts.
India has criticised the Trump administration's tariff decision and called out the double standards of Western countries that allowed Russian supplies into the market to keep global oil prices stable after the war broke out in early 2022.
Free To Buy Oil From Any Source
The Indian government has denied reports that said it nudged domestic refiners to avoid Russian oil purchases to appease the US.
The HPCL executive said the state-owned company has received no guidance or direction. "We are free to look at alternatives as and when economic situations present. If we were not to buy Russian crude for any sanctions-related reasons, the impact would not be too significant for us," Vikas Kaushal said.
Yogesh Patil, director of research – oil and gas at Dolat Capital, told NDTV Profit Indian refiners can lose $1 per barrel at the gross refining margin level, considering the country sources 35% of its supply from Russia.
However, HPCL could be the least impacted, as the refining portfolio is minimal compared to the marketing volume.
He also said the OPEC+ production increase will likely keep the oil market oversupplied till the end of 2025, causing downward pressure on prices.
