Bharat Petroleum Corporation Ltd (BPCL) is set to receive its first Iraqi crude cargo of the current financial year in the coming days as the state-run refiner looks to secure additional supplies from the Gulf amid disruptions around the Strait of Hormuz.
The company is also willing to buy crude on a free-on-board basis from Gulf suppliers if vessels are available and shipping remains commercially viable, according to Reuters.
BPCL's move comes as geopolitical tensions and risks around the key oil route complicate crude procurement for Indian refiners.
BPCL's finance chief Vetsa Ramakrishna Gupta said the company had secured a vessel willing to transport the cargo to Fujairah for a ship-to-ship transfer.
According to the report, BPCL normally requires about 2 million barrels of Iraqi crude every month. Iraq had also offered discounts for August-loading Basrah crude to encourage buyers to lift cargoes from terminals inside the Strait.
Also Read | BPCL Approves Rs 5,000 Crore Fundraise Via NCDs; Here's What It Means
Gupta said BPCL could consider such cargoes if insurance costs remain manageable and shipowners are prepared to accept the associated risks. Even additional demurrage costs of 30 to 45 days could be considered if the overall economics remain favourable, he said.
The procurement strategy comes as disruptions around the Strait of Hormuz threaten a major supply route. About a fifth of global oil and LNG supplies typically pass through the waterway.
US Pressure On Russian Oil Adds To Supply Concerns
BPCL's crude sourcing plans also come against the backdrop of proposed US measures targeting major buyers of Russian oil and gas.
BPCL said it has already secured crude requirements for September and is working on supplies for October, the report added.
Russia remains India's largest oil supplier, accounting for around 35% to 45% of the country's crude requirements on average, BPCL Chairman Sanjay Khanna said.
Also Read | War-Led Oil Spike Weighs On OMCs, But Q1 Losses Far Below Govt Estimate
He warned that losing access to such volumes while the Strait of Hormuz remains under pressure could make crude procurement significantly more difficult for Indian refiners.
Khanna said the situation remains uncertain, making it difficult to predict how crude supplies will evolve in the coming weeks.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
