BPCL in talks to buy oil priced on Dubai benchmark from Rosneft: Report

26 Jun 2023 , 11:27 AM

According to a report, Bharat Petroleum Corporation Limited (BPCL) is in talks with Russia’s petroleum refinery company Rosneft to purchase approximately 6 million metric tonnes (43.8 million barrels) of discounted Russian crude at a price based on the benchmark of Dubai.

According to the report, the deal would further solidify India’s commitment to its now-largest oil supplier in the aftermath of Western sanctions against Moscow, as well as mark Rosneft’s continued shift away from the Europe-dominated Brent benchmark and towards the Middle Eastern benchmark used in Asia.

According to the report, Rosneft has agreed to deliver the equivalent of 6 to 7 cargoes of 700,000 to 720,000 barrels per month to the state-run refinery by March 2024.

According to Reuters, contract negotiations are at an advanced stage, with both parties working out details such as payment terms. Subject to the approval of BPCL’s board of directors, the proposed agreement would result in an increase in the proportion of Russian oil being imported by the world’s third-largest oil importer.

After diverting supplies away from Europe, Russia has become India’s top oil supplier, with a 40% share. Indian refiners, which previously avoided Russian oil due to high transport costs, are now pulling up discounted crude after some Western entities and nations avoided purchases from Moscow after it invaded Ukraine.

According to the report, Russian crude sold to BPCL would be priced at a $8 per barrel discount to the Dubai benchmark.

Further, the report highlighted that Indian Oil Corp (IOC), the leading refiner in India, entered into an agreement with Rosneft in April. The deal entails the purchase of up to 1.5 million metric tons of oil per month, priced based on the Middle East benchmark. The agreed pricing includes a discount ranging from $8 to $10 per barrel.

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