IGI Logo

Indian refiner Bharat Petroleum Corp is still in talks with Russian oil major Rosneft to buy oil under a term deal, its head of finance said, adding that discounts on Russian oil are narrowing.

"Yes, there were discussions happening with Rosneft but not yet concluded," Vetsa Ramakrishna Gupta told an analysts' conference after the company's June quarter earnings report.

Reuters last month reported that BPCL is in talks to buy up to 6 million metric tons of Russian oil under a term deal with Rosneft.

Indian refiners have been snapping up discounted Russian oil

since many other countries imposed sanctions on Moscow after its invasion of Ukraine. The discounts make Russian oil cheaper than similar grades from the Middle East.

But Gupta said discounts on Russian oil are shrinking compared to previous quarters.

Narrowing discounts amid tightening supply made Russian Urals oil prices for August loading jump above the $60 per barrel price cap, sources told Reuters last month.

He said, "If the crude discount comes down (further) then there is no good advantage or commercial advantage of taking Russian crude".

An Indian government official last month said narrowing discounts and payment problems could hit India's Russian oil imports.

Discounts have been narrowing due to Opec+'s decision to cut output.

Indian refiners mostly buy Russian oil at or below the $60 per barrel price cap fixed by the European Union and the G7 nations to restrict Russia's oil revenue.

Gupta said so far his company has managed to settle payments for Russian oil, although it did face problems earlier when the cost crossed the price cap level.

"At least for the time being we are not foreseeing any problems because more banks are ready for settlement ... we have to wait and see in case of any purchases beyond the price cap if there are any issues or not," he said.

BPCL, the country's second biggest state-refiner, can use about 30%-40% of Russian oil for its three refineries with combined capacity of 726,000 barrels per day.