BPCL Boosts Spot Oil Purchases Amid Middle East Supply Disruptions
India’s state-run refiner Bharat Petroleum Corporation Limited is reviewing its crude oil import strategy almost daily as disruptions linked to the Iran conflict continue to impact global energy supplies. BPCL Chairman Sanjay Khanna said the company has significantly increased spot crude purchases after force majeure declarations from some Gulf suppliers affected planned long-term contracts. The move comes as India faces rising crude prices and supply challenges following disruptions in the Strait of Hormuz.
BPCL had initially planned to source nearly 55% of its crude needs for 2026-27 through annual agreements, mainly from Middle Eastern producers, while relying on spot markets for the rest. However, ongoing uncertainty has pushed the company to increase spot buying to maintain refinery operations at 115% capacity. The refiner currently meets around 40%-45% of its crude demand with discounted Russian oil, although those discounts have narrowed sharply from earlier levels.
Despite recent hikes in petrol and diesel prices, BPCL said it continues to incur losses on fuel sales due to elevated crude costs. The company expects spot purchases to reduce if contracted Saudi supplies improve after restoration of the kingdom’s east-west pipeline capacity. BPCL is also evaluating annual supply agreements with new producers offering flexible delivery terms and competitive pricing, while continuing optional crude purchase arrangements with Brazil. Meanwhile, the company reported a 42.6% rise in fourth-quarter profit, supported by steady fuel demand.
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