BPCL struggles to get Russian crude for March amid stringent US sanctions

India has been an enthusiastic buyer of discounted Russian oil since the invasion of Ukraine, with the country now it’s No. 1 supplier. Bloomberg

Indian refiner Bharat Petroleum Corp Ltd. isn’t able to get Russian crude cargoes for March delivery, underlining how stringent US sanctions have upended Moscow’s oil trade and forced Asian buyers to seek alternatives.

“Crude availability is not an issue,” the company’s finance chief, Vetsa Ramakrishna Gupta, said on Thursday during an analyst conference call. “Only the commercial benefits of Russian crude may not be available.”

India’s second-biggest refiner has been relying on Russian barrels, which are at least $3 per barrel cheaper than dated Brent, for about a third of its feedstock, Gupta said. That may fall to about a fifth due to the current shortage, he said.

India has been an enthusiastic buyer of discounted Russian oil since the invasion of Ukraine, with the country now it’s No. 1 supplier. But US sanctions imposed earlier this month have tightened supplies, pushing Indian buyers to tap all available options.

BPCL will source US West Texas Intermediate crude to meet its low-sulfur requirements, and sour grades from the Middle East on a spot basis, Gupta said.

Despite the uncertainty in crude supplies from Russia, BPCL will continue to secure 55% of its oil demand via annual term contracts, 35% from spot markets, and the rest from domestic suppliers, Gupta added.

The supply disruption from Russia “is only a temporary phenomenon,” Gupta said.

“Some time is required to rebalance the market, the supply chain has to be resettled,” he said, adding this could take two to three months.