Bharat Petroleum Corporation Ltd (BPCL) is set to receive its first Iraqi crude cargo of the current financial year within the next few days as the state-run refiner looks to secure additional supplies from the Gulf amid disruptions around the Strait of Hormuz. According to reports from Reuters, BPCL's finance chief Vetsa Ramakrishna Gupta confirmed the company had secured a vessel willing to transport the cargo to Fujairah for a ship-to-ship transfer. The company normally requires about 2 million barrels of Iraqi crude every month and is also willing to buy crude on a free-on-board basis from Gulf suppliers if vessels are available and shipping remains commercially viable. As reported by Reuters, Gupta stated that "Fortunately, we got the vessel. One vessel owner was willing to move the product to Fujairah to do the STS transfer (ship-to ship)." BPCL has already secured crude requirements for September and is working on supplies for October, demonstrating its proactive approach to supply chain management.
Iraq had also offered discounts for August-loading Basrah crude to encourage buyers to lift cargoes from terminals inside the Strait. As reported by Reuters, Gupta indicated that BPCL could consider such cargoes if insurance costs remain manageable and shipowners are prepared to accept the associated risks. The company is also prepared to accept additional demurrage costs of 30 to 45 days if the overall economics remain favourable. Gupta stated that BPCL would be willing to lift cargoes inside the Strait of Hormuz, if the insurance costs were reasonable and the shipowner was willing to accept the risk. He added that "Even if the cargo is held for 30 to 45 extra days, we will still explore it if there are commercially viable reasons."
Recent data from Kpler reveals that Gulf oil flows remain significantly below pre-conflict levels, despite US claims about the Hormuz blockade. According to Kpler's tracking data, crude oil exports via the Strait of Hormuz dropped to 4.49 million barrels per day in August, down from 15.82 million barrels per day in the three-month period leading up to the conflict. Asia's crude oil imports from the Middle East were 10.76 million barrels per day in August, up from July's 10.76 million bpd, but still well below the 15.82 million bpd average before the conflict began. Kpler estimates that India's crude imports in August were 4.51 million barrels per day, down from 5.07 million barrels per day in July and at their lowest level since March. The data suggests that any sharp increase in exports would be first visible in Indian port arrivals, as the journey time from the Gulf of Oman to India's West Coast is less than a week.
The procurement strategy comes as disruptions around the Strait of Hormuz threaten a major supply route. According to Reuters, about a fifth of global oil and LNG supplies typically pass through the waterway. BPCL Chairman Sanjay Khanna warned that losing access to such volumes while the Strait of Hormuz remains under pressure could make crude procurement significantly more difficult for Indian refiners. Khanna said the situation remains uncertain, making it difficult to predict how crude supplies will evolve in the coming weeks. As reported by Reuters, Gupta noted that "Iraq is one of the most affected countries by the Iran War and the closing of the Strait of Hormuz," highlighting the strategic importance of securing alternative supply routes.
BPCL's crude sourcing plans also come against the backdrop of proposed US measures targeting major buyers of Russian oil and gas. As reported by Reuters, Russia remains India's largest oil supplier, accounting for around 35% to 45% of the country's crude requirements on average. Khanna emphasized that the current situation adds pressure to India's energy security, with geopolitical tensions and risks around the key oil route complicating crude procurement for Indian refiners. The U.S. Senate has passed a bill that allows the president to impose tariffs up to 100 percent on major buyers of Russian gas and oil, including India, to increase economic pressure against Moscow for its 2022 invasion of Ukraine. Khanna stated that "It's a very unsettling situation. A ban on this quantity would make it 'a challenge' for oil companies in order to meet demand and secure crude."
