India Increases Middle Eastern Crude Procurement Amid Declining Russian Supply

India's state-run Bharat Petroleum Corporation Limited (BPCL) has recently increased its procurement of crude oil from the Middle East due to a decline in Russian supply. BPCL, the second-largest fuel retailer in India, typically buys Russian crude at discounted rates from the spot market but is now facing a shortage of Russian oil, according to Vetsa Ramakrishna Gupta, BPCL's head of finance.

While Russian crude has historically been a significant supplier for India, BPCL is no longer receiving the same volume of oil it did earlier this year. Gupta mentioned that the company was facing a shortfall of two to three cargoes per month. To make up for this, BPCL has turned to Middle Eastern suppliers, specifically Oman, to fill the gap.

Gupta further explained that if the decline in Russian oil supply persists, BPCL will also explore purchasing U.S. West Texas Intermediate (WTI) crude, along with additional Middle Eastern grades, depending on which option proves to be more cost-effective.

India has been a major importer of Russian crude oil since the Russian invasion of Ukraine, capitalizing on cheaper oil prices. Despite the challenges in recent months, Russia remains India's largest oil supplier, although imports from Russia fell by 13% in November compared to October. During the same period, Indian crude imports from the Middle East increased by 10.8%, with Iraq and Saudi Arabia also continuing to supply oil to India.

As India navigates these shifts in global oil markets, BPCL’s strategy of diversifying sources for crude procurement reflects the evolving dynamics of the international energy trade.