State-run Bharat Petroleum Corporation (BPCL) has sharply increased spot crude purchases and raised the share of Russian crude in its refining basket as the Iran war disrupts traditional West Asian oil supply arrangements, forcing Indian refiners to aggressively diversify sourcing amid tightening global energy markets, senior company executives said during the company’s earnings call.
BPCL increased the share of Russian crude processed on a quarterly basis from 25% in Q3FY26 to 31% in Q4FY26, helping support refining economics at a time when freight, insurance and West Asian crude premiums have surged sharply following disruptions around the Strait of Hormuz.
ALSO READIndia scales up Russian crude purchases as premiums halve
Structural Realignment
At the same time, spot crude procurement by BPCL has risen to 55-65% of total imports over the past two months compared with around 45% in the pre-war period, reflecting the growing disruption in annual term supplies from West Asia.
“When we started the last fiscal, procurement of crude through long-term contracts was around 55%, and spot purchase around 45%. In the past two months, term crude procurement has come down, with spot procurement being around 55-65% depending on the supply situation,” BPCL Director (Finance) Vetsa Ramakrishna Gupta said during the earnings call.
“As long as the conflict scenario continues, this trend of higher spot purchases may continue,” he added.
The development highlights the extent to which the continuing conflict in West Asia has disrupted global crude flows and reshaped India’s oil sourcing strategy. Before the war, Saudi Arabia, Iraq and the UAE were among India’s largest crude suppliers, with West Asia accounting for nearly 60-70% of the country’s oil imports.
BPCL had initially planned to source around 55% of its crude requirement through annual term contracts during FY27, broadly in line with previous years. However, apart from Saudi Aramco, most West Asian suppliers have struggled to maintain contracted volumes amid supply disruptions and shipping uncertainty.
“When we come to crude procurement today, we are taking spot purchase on an M-minus-two basis. June procurement is complete, July requirement is largely tied up and we have already started the August cycle,” Gupta said.
The company said it has diversified sourcing across Russia, West Asia, the US and Venezuela to ensure uninterrupted refinery operations and fuel supplies.
ALSO READRupee nears 97/$ amid higher oil prices, US yields
BPCL currently operates refining capacity of around 41 million tonne (MT) annually and requires nearly 40 MT of crude oil every year. The company said its gross refining margin (GRM) for FY26 stood at $11.74 per barrel despite elevated crude volatility and supply disruptions.
Transatlantic Diversification
For the first time, BPCL has procured two US cargoes of LPG on a spot purchase basis which have arrived in May 2026. Even if it takes about 90 days to and fro, cargoes from the US will ease the supply scenario.
BPCL’s LPG business accounts for nearly 28% of the country’s liquefied petroleum gas market, covering around 93.5 million cylinder connections.
The company also clarified during the earnings call that there is no shortage of retail fuel in the market and no restrictions have been imposed on dealer credit despite continuing under-recoveries on petrol, diesel and LPG sales.
On overseas projects, BPCL said the Mozambique LNG project site is around 42% complete and first LNG cargo is expected by mid-2028.
The Brazil upstream project, however, has been delayed by 1-2 years, with oil deliveries now expected from 2031 onwards.
Meanwhile, BPCL continues to expand its domestic fuel retail network.
BPCL Director (Marketing) Shubhankar Sen said the company plans to add over 1,000 fuel stations during FY27 after adding around 1,700 retail outlets in FY26, taking its total network to 25,300 outlets.
The company’s fuel sales rose to 54.18 MT in FY26 from 52.40 MT in the previous fiscal, reflecting continued growth in domestic fuel demand despite elevated global crude volatility.
TOPICSBharat Petroleum CorporationThis article was first uploaded on May twenty-one, twenty twenty-six, at fifty-nine minutes past twelve in the am.