India's BPCL Expects Russian Crude Purchases to Fall in November as Costs Rise

India's state-owned Bharat Petroleum Corporation Ltd, or BPCL, expects to buy less Russian crude oil in November because higher freight costs have made some cargoes less competitive than supplies from the Middle East. The company's finance director, Vetsa Ramakrishna Gupta, told analysts following its quarterly results on Monday, October 26, that Russian volumes for next month had been significantly reduced.

The change is a commercial purchasing decision driven by delivered costs, according to the company's explanation. A crude oil shipment's effective price includes not only the cost of the oil itself but also transport and other charges. Even when a grade is offered at a discount, higher freight rates can make alternative supplies more economical for a refinery.

BPCL said Russian crude accounted for approximately 37% of its sourcing mix during the July-to-September quarter. The refiner has increased supplies from Middle Eastern producers compared with the first quarter and expects higher volumes from that region in October and November. The company also said it had secured sufficient crude for its operations despite supply-chain challenges.

Refinery output may moderate in the coming quarters because of scheduled maintenance. BPCL expects work at its Mumbai facility to require a roughly 30-day shutdown of some units, while a turnaround at its Kochi refinery could last 30 to 40 days for affected units. Such planned work is distinct from an unplanned supply outage.

The announcement shows how shifts in freight costs and regional oil availability are changing purchasing decisions among major Asian refiners. It does not establish a permanent halt to BPCL's Russian crude imports, nor does it mean that all Indian refiners are adopting the same purchasing strategy. Actual November import volumes will become clearer as shipments arrive.