BPCL in talks for Russian oil deal, discounts narrow
Bharat Petroleum Corp is reportedly in talks with Russian oil major Rosneft to buy oil under a term deal as discounts on Russian oil are narrowing. According to a report by Reuters, Vetsa Ramakrishna Gupta, head of finance at BPCL said, “Yes, there were discussions happening with Rosneft but not yet concluded". BPCL is in talks to buy up to 6 million metric tons of Russian oil under a term deal with Rosneft, Reuters reported last month.
OMCs in India have been snapping up discounted Russian oil since the West imposed sanctions on Moscow after it invaded Ukraine. The discounts make Russian oil cheaper than similar grades from the Middle East. However, the BPCl financial head said that the discounts on Russian oil are shrinking compared to previous quarters.
Narrowing discounts amid tightening supply made Russian Urals oil prices for August loading jump above the $60 per barrel price cap. He said, "If the crude discount comes down (further) then there is no good advantage or commercial advantage of taking Russian crude". Indian refiners mostly buy Russian oil at or below the $60 per barrel price cap fixed by the European Union and the G7 nations to restrict Russia's oil revenue.
Gupta said so far his company has managed to settle payments for Russian oil, although it did face problems earlier when the cost crossed the price cap level. "At least for the time being we are not foreseeing any problems because more banks are ready for settlement ... we have to wait and see in case of any purchases beyond the price cap if there are any issues or not," he said.
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