India’s state-run refiner Bharat Petroleum Corp BPCL sees its Russian oil processing down to 20% in March from 31% this month as it awaits offers from traders, its head of finance Vetsa Ramakrishna Gupta told an analyst call.

The company and other state refiners such as Indian Oil Corp IOC, Hindustan Petroleum HINDPETRO, and Mangalore Refinery and Petrochemicals MRPL buy Russian oil in the spot market and the lack of clarity regarding its availability is forcing them to look for alternatives.

BPCL’s Russian oil processing declined to 31% in December quarter from about 35-40% in the previous month. The company, along with other Indian state refiners, received a lower supply of Russian oil in January and February.

Gupta said lack of offers from traders for sale of Russian oil for March delivery could be ‘temporary’ as Russia has not cut its oil output.

Washington has imposed sweeping sanctions targeting Russian producers and tankers, disrupting supply from the world’s No. 2 producer and tightening ship availability.

Gupta said his company meets 55% of its oil needs through annual contracts and up to 35% from the spot market.

Indian refiners buy Russian oil on a delivered basis, with seller arranging the tanker and insurance. “Pre condition is that they (traders) do not move crude in any of the sanctioned vessel,” he added.

To make up for the shortfall, Indian refiners have floated tenders for oil imports and are purchasing grades such as Abu Dhabi’s Murban grade.
Source: Reuters