EconomyEnergy
BPCL buys 1 million barrels of US crude for Mumbai at a steep premium
The state-run refiner has bought a cargo of West Texas Intermediate for delivery around the turn of the year, paying about $18 a barrel over dated Brent as Indian refiners keep looking beyond the Gulf for supply.
Key points
- BPCL has bought 1 million barrels of US WTI crude, trade sources said.
- It paid a premium of about $18 a barrel over the dated Brent benchmark.
- The cargo is due to discharge at Mumbai between late December and early January 2027.
Bharat Petroleum Corporation has bought 1 million barrels of US crude for its Mumbai refinery, trade sources said on Tuesday, as Indian refiners line up supplies for the turn of the year.
The state-run company bought West Texas Intermediate (WTI), the US benchmark grade, at a premium of about $18 a barrel to dated Brent, the price on which much of the world’s physical oil is traded. The cargo is due to discharge at Mumbai between the end of December and early January 2027. BPCL does not comment on commercial deals.
Why a costly cargo
The size of the premium shows how tight supply has become. Brent itself fell 7% on Monday on hopes of a deal to end the US-Iran conflict, but was still near $104 a barrel on Tuesday morning after reports of US strikes on Iran’s Qeshm Island near the Strait of Hormuz.
For Indian refiners, much of whose crude normally passes through Hormuz, US barrels shipped across the Atlantic offer a route that avoids the Gulf altogether, even if they cost more to land. BPCL’s purchase secures supply for the year-end while talks over the Gulf remain unsettled.
The deal comes days after BPCL reported a 21% fall in its September-quarter profit, hurt by weaker fuel marketing margins and losses on cooking gas.