Bharat Petroleum Buys 1 Million Barrels Of US Crude Oil As High Freight Costs Make Russian Oil Less Attractive
State-owned Bharat Petroleum Corporation Limited (BPCL) has purchased 1 million barrels of US West Texas Intermediate (WTI) crude oil as Indian refiners reassess sourcing options amid changing freight costs.
As per a Reuters report, BPCL secured the cargo for delivery to Mumbai between late December and early January.
The refiner reportedly agreed to pay a premium of approximately $18 per barrel over the Dated Brent benchmark.
The purchase comes as tanker freight rates ease from record highs reached in early October, making some international crude shipments more commercially attractive.
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BPCL recently announced plans to significantly reduce Russian crude purchases in November because higher transportation costs and premiums have weakened their price advantage.
The company's head of finance, Vetsa Ramakrishna Gupta, said Middle Eastern crude grades currently offer better commercial terms.
Russian oil accounted for 37% of BPCL's total crude supplies during the July-September quarter.
However, the company expects a substantial reduction in Russian cargo purchases for November.
The shift reflects a broader trend among Indian refiners towards alternative supplies as Middle Eastern crude becomes more competitive.
Improved oil flows through the Strait of Hormuz have also increased the availability of Middle Eastern cargoes.
Easing Tanker Freight Rates Encourage Global Crude Purchases
Shipping costs have declined over the past two weeks after reaching unprecedented levels in early October.
Lower freight rates have encouraged Asian crude buyers, particularly Chinese refiners, to explore supplies from Brazil and West Africa.
However, transportation expenses remain elevated for long-distance shipments.
In mid-October, hiring a supertanker to transport crude from the US to Asia reportedly cost approximately $60 million.
Those high costs had discouraged Asian refiners from booking substantial volumes of American crude for November delivery.
BPCL's latest purchase highlights how refiners are adjusting procurement strategies in response to freight rates, regional supply availability and differences in crude pricing.
The company's sourcing decisions remain closely linked to the relative commercial attractiveness of Russian, Middle Eastern and American oil.
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