Bharat Petroleum Corporation Ltd (BPCL) expects its Russian crude oil purchases to decline in November. Higher shipping costs and less attractive offers are making Middle Eastern crude more economical for the Indian oil refiner.
Vetsa Ramakrishna Gupta, BPCL's head of finance, told analysts that Middle Eastern crude had become more commercially viable than Russian oil. He shared the update after the company's quarterly earnings announcement on Monday.
Gupta said Russian cargoes for November had been "significantly reduced" because of higher freight costs. The shift comes as Indian refiners reassess their crude sourcing strategies based on prices, transportation expenses, and the availability of supplies.
During the July-to-September quarter, Russian crude accounted for around 37% of BPCL's total crude sourcing mix. However, the company reported higher supplies from the Middle East compared with the first quarter. It also expects volumes from the region to increase in October and November.
India's crude oil sourcing patterns have changed as refiners weigh the commercial benefits of buying from different regions.
Ship-tracking data showed that India's imports of Middle Eastern crude oil surged in September, returning to pre-war levels. At the same time, Indian refiners reduced Russian oil purchases amid stiff competition from China for Russian supplies.
Higher freight costs have also affected the economics of Russian crude purchases. Even when the price of crude oil appears attractive, transportation expenses can reduce the overall savings for refiners.
However, the price difference between Russian and other grades has recently narrowed. BPCL said premiums for Russian crude had fallen to around $1–$2 per barrel for December cargoes, compared with $12–$13 per barrel in October.
This change could influence purchasing decisions in the coming months. Refiners will continue to assess crude prices, freight rates, and supply conditions before deciding how much oil to source from each region.
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BPCL also expects its refinery operations to moderate during the third and fourth quarters of the financial year. The company plans maintenance activities at its Mumbai and Kochi refineries.
At the Mumbai refinery, some units will undergo a planned shutdown lasting around 30 days. At the Kochi refinery, certain units will undergo a maintenance turnaround expected to last between 30 and 40 days.
These activities may affect refinery runs as the company carries out the scheduled work. The maintenance is part of BPCL's operational plans for the two facilities. Separately, BPCL said it plans to dilute at least a 30% stake in its proposed refinery and petrochemicals project in Andhra Pradesh. The planned stake sale is another development in the company's expansion plans.
The latest updates highlight BPCL's focus on managing crude procurement costs while preparing for scheduled refinery maintenance and progressing with its proposed Andhra Pradesh project. Its sourcing decisions in the coming months will depend on the relative economics of Russian and Middle Eastern grades.
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