BPCL looks towards Middle East to make up for shortfall in crude oil supply amid Russia-Ukraine conflict

Urals oil is a reference oil brand used as a basis for the pricing of the Russian export oil mixture. It is a mix of heavy sour oil of the Urals and the Volga region with light oil of Western Siberia. Other reference oils are Brent, West Texas Intermediate, and Dubai.

BPCL is India's second largest refiner and two million barrels of Russian Urals every month on a delivered basis and refines at BPCL's 310,000 barrels per day (bpd) Kochi refinery in southern India.

According to the report, BPCL has booked one million barrels of Urals for loading in March and three million in April.

In the arrangement, the exporter seller arranges for insurance of the cargo and ships.

"No one knows how the situation will pan out in April, so BPCL wants to be prepared," Reuters quoted a source as saying, who also said that traders have told BPCL that they are unwilling to make future commitments though they will fulfill the existing ones.

However, BPCL has not received assurance of additional supplies from Gulf producers as allocations for April loading are due to be finalised next week, said the report.

The company is also mulling to draw from its inventory to make up for any shortfall due to missing Russian supplies.

On Monday, the country's biggest refiner Indian Oil Corp (IOC) said it would accept Russian oil and Kazakhstan's CPC blend only on a delivered basis citing insurance risks.

Last week IOC has bought Urals crude in a tender after a gap of two years.