The cargo was purchased from the Emirates National Oil Co., trade sources said. BPCL bought the cargo via a tender floated last month at a price linked to the Brent. The purchase price linked to the Brent was competitive against West African crude.
Last Friday, BPCL also bought 1 million barrels of crude via a spot tender, the officials said but didn’t provide details on origin and price.
During the first half of July, BPCL bought 500,000 barrels each of Mars and Poseidon varieties of medium-to-high-sulfur crude for delivery to its Kochi refinery on the west coast of India between September 26 and October 15, 2017. BPCL bought the quantity via a tender that closed on July 14.
BPCL made these purchases as the prices of the US varieties have turned attractive after the recent OPEC cuts and rising Shale oil in the US.
BPCL makes 25%-30% of its overall imports of around 25 million mt/year through tenders for its four refineries in Kochi, Mumbai, Bina, and Numaligarh.
Another state-run refinery, Hindustan Petroleum Corp. Ltd., also has plans to import US sweet crude in the next few months for its Vizag refinery in South India, company officials said.
HPCL’s two refineries — in Mumbai and Vizag — have a very large crude import appetite of 2 million barrels/month of US crude , J. Ramaswamy, the company’s director of finance, said on Friday.
Earlier in July, state-run Indian Oil Corp. sealed its first deal to import 1.6 million barrels from the US for delivery in the first week of October at its Paradip refinery on the east coast. The deal made IOC the first state-run refiney in India to buy US crude.
The IOC deal came shortly after Indian Prime Minister Narendra Modi’s visit to the US, where both countries discussed a possibility of boosting cooperation in the energy sector.
Analysts said that IOC’s move to add the US to its list of suppliers could open the way for more purchases by other Indian refiners, both state-run and private.
The recent OPEC/non-OPEC cuts have meant that India had to diversify its crude suppliers, with IOC, the country’s largest refiner, making a purchase of US sour crude.
India depends on OPEC countries for 86% of its oil imports, with Iraq, Saudi Arabia, Iran, and UAE as its major suppliers.
Iraq remained India’s top crude supplier in May for the second straight month, followed by Saudi Arabia, with refiners’ increased demand for the cheaper Basra Heavy oil grade which is suitable for refineries with coker units and also good for conventional refiners that produce bitumen.
For January-June 2017, India’s crude imports fell 1% year on year to 105.66 million mt.
In 2016, India’s total crude imports rose 9.6% year on year to 215.43 million mt, provisional data from the Petroleum Planning & Analysis Cell showed.