Bharat Petroleum Corporation Ltd (BPCL), a state-run Indian refiner, is increasing its procurement of Middle Eastern crude to offset reduced availability of discounted Russian oil, according to the company’s finance head, Vetsa Ramakrishna Gupta. In a recent interview, Gupta noted that BPCL is unable to secure around 8 to 10 million barrels of Russian crude for January loading, typically sourced from the spot market.

India, which became a leading importer of Russian seaborne oil after the European Union imposed sanctions on Moscow following its 2022 invasion of Ukraine, now sources over one-third of its crude imports from Russia. However, BPCL is facing supply challenges. Gupta explained that the shortfall amounts to two to three cargoes monthly, and the company has been meeting the deficit with Middle Eastern crude, including recent purchases of Omani oil.

Gupta added that Russian oil accounts for 35–37% of the crude processed at BPCL’s three refineries, which have a combined capacity of 706,000 barrels per day (bpd). If Russian supplies face significant disruption in the future, BPCL plans to explore alternatives such as West Texas Intermediate (WTI) crude or other affordable Middle Eastern options.

The reduced availability of Russian crude stems from rising domestic demand, output cuts agreed under OPEC quotas, and production declines forecasted for 2024. Moreover, Russian state oil firm Rosneft has committed to supplying 500,000 bpd to Indian private refiner Reliance under a long-term contract starting in 2025, further tightening market availability.

To diversify its supply sources, BPCL secures about 53% of its crude through long-term agreements and recently purchased Argentinian crude for the first time. It also plans to lift 10,000 bpd from Qatar under a term deal in FY 2025/26 while maintaining agreements with other suppliers.

On the investment front, BPCL aims to invest ₹1.7 trillion ($19.94 billion) by 2028/29, with 50% financed through debt. The company has secured ₹32,000 crore in loans from Indian banks for its Bina refinery expansion and plans to refinance ₹4,000–₹5,000 crore in loans next year. BPCL is also exploring external borrowings for major investments slated for 2026/27, contingent on favorable interest rate cuts by the US.

BPCL’s international investments include ₹25,000 crore for oil and gas projects in Mozambique and Brazil over the next five years. Its foreign debt currently stands at $2 billion, including investments in overseas exploration ventures.

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