U.S. sanctions hit Russian oil supply to India; BPCL says supplies may be impacted

U.S. sanctions on Russian oil sector impact Indian oil flows, with BPCL facing shortage for March cargoes.

The wide-ranging sanctions imposed by the U.S. on the Russian oil sector have started to dent near-term oil flows to India with state-owned Bharat Petroleum Corporation Ltd (BPCL) saying not enough cargoes are available for March.

The U.S. on January 10 issued sweeping sanctions targeting the Russian energy sector. The measures include sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, the blacklisting of 183 vessels involved in Russian energy exports, and curbs on dozens of oil traders, oilfield service providers, tanker owners and managers, insurance companies and energy officials.

The sanctions were announced at a time when Indian refiners had started to negotiate for March cargoes.

BPCL Director (Finance) Vetsa Ramakrishna Gupta told in an analyst call on Thursday that Russian oil had been booked for January and February in the previous two months but for March "we are not getting sufficient cargoes".

The company saw Russian oil in the overall basket of crude oil it processes into fuels like petrol and diesel, falling to 20% in March from 31% in the October-December quarter, he said.

Russian oil made up for 34-35% of all oil that BPCL processed at the start of the current financial year in April 2024.

He said there is enough oil available in the market and the company would look at alternatives such as the Middle East to replace the lost volumes from Russia.