BPCL intends to establish an oil trading desk in Singapore and Dubai

13 Feb 2024 , 02:00 PM

According to industry experts familiar with the matter, the state-run Bharat Petroleum Corporation (BPCL) intends to build a trading desk in Singapore or Dubai to broaden its worldwide reach, sourcing, and trading in crude oil and finished products.

BPCL plans to set up the desk this year, according to sources.

According to insiders, the Singapore desk would also assist the corporation in trading energy futures and enable foreign finance. Trading desks are used to buy and sell oil products on the worldwide market. The desk is manned by a licensed trader, and transactions occur instantaneously.

‘BPCL is planning to set up a trading desk because being in the center of action and knowing the ecosystem helps you get better commodity deals,’ said an industry insider familiar with the negotiations.

A trading desk enables enterprises to purchase crude oil from the worldwide market in real time, lowering import prices by securing the best price and quality.

Officials said that the Russia-Ukraine war interrupted crude oil supply in the market, causing Indian refiners to explore crude sourcing options outside of the Middle East, which had previously been the primary source of oil supplies for Indian refiners.

Last fiscal year, BPCL acquired 38.2 million metric tonnes of crude for its three refineries in Mumbai, Bina (Madhya Pradesh), and Kochi. According to BPCL’s FY2023 annual report, the refineries processed five new grades of crude oils that the business purchased for the first time.

The establishment of a trading desk will provide BPCL with the agility to swiftly enter and exit markets, given the continuous nature of operations. This will expedite the turnaround time for crude oil trading and enhance overall flexibility, as stated by the official.

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