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India looks to Gulf for oil to replace Russian supply: Report

India looks to Gulf for oil to replace Russian supply: Report

According to a person familiar with the situation, India’s state-run refiner Bharat Petroleum Corp is seeking more oil from Middle Eastern suppliers for April, concerned that Western sanctions against Russia could cause the supply of Urals crude to be interrupted.

BPCL, India’s second-largest state refiner, buys an average of two million barrels of Russian Urals each month on a delivered basis. The seller provides for the insurance of the cargo and the shipping vessels involved. The oil is refined in the BPCL Kochi refinery in southern India, which has a capacity of 310,000 barrels per day (bpd).

In March, BPCL has booked one million barrels of Urals for loading, and three million barrels for loading in April.

According to the source, trading companies have indicated that they are ready to honor current obligations but would not bid for supplies in the next months, who added that “no one knows how the scenario will roll out in April,” therefore BPCL wants to be prepared.

In response to Russia’s invasion of Ukraine, which Moscow refers to as a “special operation,” Western nations have expressed universal criticism and imposed a slew of sanctions.

Among those targeted by the United States and its allies have been Russia’s central bank, major corporations, billionaires, and government figures, including President Vladimir Putin.

According to the source, Gulf producers have not committed to further supply for BPCL, even though allocations for April loading are expected to be confirmed next week.

According to the source, BPCL also expects to draw from its stockpiles to make up for any deficit in Russian oil supplies.

An email sent to the corporation requesting comment did not respond.

Given the risks associated with insurance, Indian Oil Corp (IOC), the country’s largest refiner, said on Monday that it would only take Russian oil and Kazakhstan’s CPC mix on a delivered basis. After a two-year hiatus, the International Oil Corporation (IOC) purchased Russian crude in a tender last week.

The State Bank of India, India’s largest lender, has informed customers that it would not conduct any deal with sanctioned firms in any currency.

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