Indian state refiners eye Russian oil as discounts widen, sources say
Indian state refiners - Indian Oil Corp (IOC.NS), opens new tab, Hindustan Petroleum Corp (HPCL.NS), opens new tab, Bharat Petroleum Corp (BPCL.NS), opens new tab and Mangalore Refinery Petrochemical Ltd (MRPL.NS), opens new tab - paused Russian oil purchases last month as discounts narrowed.
The state refiners, which account for more than 60% of India's 5.2 million barrels per day of refining capacity, buy Russian oil on a delivered basis.
Spot discounts for Russian Urals crude delivered to India in October have widened to about $2.70 per barrel from $1-$1.50 per barrel in late July, the sources said. The wider discount makes delivery of Urals cheaper than it was in July.
India became the largest customer of Russian seaborne oil from 2022, after Western countries shunned Russian oil and imposed sanctions on Moscow for its invasion of Ukraine.
U.S. President Donald Trump last month threatened sanctions on buyers of Russian exports unless Russia agrees to a peace deal with Ukraine. Trump and Russian President Vladimir Putin will discuss a possible deal to end the war in Ukraine when they meet on Friday in Alaska.
"We will wait for the outcome of Trump-Putin talks that will give us some indications," one of the sources said.
State-run Bharat Petroleum Corp (BPCL.NS), opens new tab aims to continue using Russian oil to meet up to 35% of its processing needs if there are no new sanctions, Vetsa Ramakrishna Gupta, its finance head, told an analyst call on Thursday.
BPCL's Russian oil purchases slowed in July as discounts narrowed, he added.
Indian state refiners have turned to spot purchases from countries including Brazil, West Africa, and the United States to replace lower Russian oil supplies.
Russian Urals crude is priced at a discount to Brent crude oil, a widely used oil pricing benchmark.
Russian oil accounts for more than a third of India's overall purchases. Unlike state refiners, private companies, including Reliance Industries (RELI.NS), opens new tab and Nayara Energy, have term contracts to buy Russian oil.
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