State-run Bharat Petroleum Corporation Limited (BPCL) is recalibrating its crude import strategy almost daily and ramping up spot purchases after the U.S.-Israeli conflict with Iran disrupted Middle East supplies, according to Chairman Sanjay Khanna. As per Reuters, India's state-run refiner has been hit by rising crude prices and supply disruptions following the closure of the Strait of Hormuz. The company had planned to source about 55% of its crude requirement for 2026/27 through annual contracts, mainly from Middle Eastern producers, and the rest through spot markets. However, force majeure declarations by some Gulf suppliers have pushed BPCL to increase spot buying to keep refineries running at 115% capacity.
State-run Bharat Petroleum Corporation Limited (BPCL) has significantly increased its intake of Russian crude oil to around 41% amid ongoing supply disruptions from the West Asia conflict, according to a senior company official. Russian crude now accounts for about 40-41% of total imports, up from 31% in Q4 FY26 and 25% in Q3 FY26. As per SocialNews.XYZ, Vetsa Ramakrishna Gupta, Director (Finance), BPCL, stated that the company has stepped up spot purchases of Russian crude to manage supply uncertainties arising from disruptions in Gulf shipments. The company has secured crude supply till July 2026, with a significant portion sourced from Russia. BPCL meets 40%-45% of its crude needs with Russian oil bought largely in the spot market after Washington granted sanctions waivers, though discounts have narrowed sharply.
Premiums on Russian crude have fallen to $5 to $6 per barrel to dated Brent on a delivered basis from $10 to $12 earlier, according to finance director Vetsa Ramakrishna Gupta. Despite recent fuel price hikes, BPCL continues to incur a revenue loss of 25 to 30 rupees per litre on diesel and 10 to 14 rupees per litre on petrol, Gupta said. BPCL operates three refineries in India with a capacity to process 706,000 barrels per day of oil. The refiner also has an optional annual crude purchase arrangement with Brazil and is evaluating annual supply deals with new producers for next year if they offer flexible delivery terms and competitive pricing.
BPCL reported a 42.6% rise in fourth-quarter profit before exceptional items and tax to ₹86.07 billion ($892 million), helped by steady fuel demand, as per Reuters. The company posted a 6.3% rise in revenue to ₹1.35 lakh crore for the quarter. According to SocialNews.XYZ, this represents a significant improvement from the previous quarter's flat performance. The strong quarterly results demonstrate BPCL's ability to navigate geopolitical challenges while maintaining operational efficiency.
BPCL stated that under-recovery on retail fuel products remains a short-term challenge. The company had an under-recovery of ₹12,318.52 crore in FY26 on selling domestic cooking gas LPG below cost, which needs to be made good by the government through subsidy. BPCL, along with other state-owned fuel retailers, insulated the domestic market from volatility that hit the international market after the start of the West Asia conflict. The full impact of the ongoing war-driven disruption in global energy markets will be visible in the June quarter.
BPCL shares traded 2.25% higher at ₹293 on the BSE on Wednesday, reflecting positive market sentiment following the strong quarterly results and the company's strategic response to supply challenges. The positive investor response demonstrates confidence in BPCL's ability to navigate geopolitical tensions while maintaining operational performance. BPCL expects spot purchases to ease if Saudi Arabian contracted supplies improve after the restoration of the Kingdom's east-west pipeline capacity. The company has set a capital expenditure target of ₹25,000 crore for FY27, compared with ₹20,400 crore spent in FY26, indicating continued investment in infrastructure and operational capabilities.
