OMC Stocks Gain After BPCL Signals Long-Term Crude Supply Push

Shares of oil marketing companies moved higher on May 20 after Bharat Petroleum Corporation Ltd (BPCL) outlined plans to strengthen long-term crude oil access and maintain refinery operations amid continued volatility in global energy markets.

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BPCL, Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL) traded 1%-1.5% higher during the afternoon session after management commentary following BPCL’s March quarter earnings.

Speaking during a post-results conference call, BPCL Director (Finance) V R K Gupta said the company aims to secure ownership-linked crude supplies of nearly 6-7 million metric tonnes annually over the long term.

According to the management, the company has allocated capital toward upstream investments to improve supply security at a time when global crude markets remain under pressure due to the ongoing West Asia conflict.

Refinery Operations Continue At High Capacity

BPCL said there has been no shortage of crude oil or retail fuels such as petrol and diesel despite disruptions in international supply chains.

The company stated that its refineries are operating at nearly 118% capacity utilisation, indicating continued crude availability.

BPCL Chairman Sanjay Khanna said the company has been adjusting its crude sourcing strategy almost daily after tensions involving Iran and the U.S.-Israel conflict disrupted Middle East energy flows.

India, which depends heavily on crude imports, has faced higher crude oil prices and supply uncertainties following disruptions around the Strait of Hormuz. Retail fuel prices in the domestic market were also revised upward twice within a week.

BPCL had originally planned to source nearly 55% of its crude requirement for FY27 through annual contracts, largely from Middle Eastern suppliers, with the remaining purchases coming through spot markets.

However, force majeure declarations from some Gulf suppliers led the company to increase spot market purchases to sustain refinery operations. Khanna said spot purchases have risen sharply in recent weeks due to supply uncertainties.

Russian Crude Continues To Play Key Role

BPCL said Russian crude continues to account for nearly 40%-45% of its total crude requirement. These purchases are mainly routed through the spot market under existing sanctions waivers granted by the U.S.

The company added that discounts on Russian crude have narrowed significantly. According to Gupta, premiums have reduced to nearly $5-$6 per barrel over dated Brent on a delivered basis, compared with earlier levels of $10-$12 per barrel.

BPCL is also evaluating annual supply arrangements with additional producers for future requirements, while continuing to prioritise suppliers located closer to India.

The company currently operates three refineries with a combined processing capacity of 706,000 barrels per day.

Q4 Earnings And Fuel Losses

BPCL reported a standalone net profit of ₹3,191.49 crore for the March quarter compared with ₹3,214.06 crore in the year-ago period, according to its exchange filing.

The company recorded an impairment loss of ₹4,349 crore on upstream assets during the quarter.

Management also stated that despite recent fuel price hikes, the company continues to incur losses of ₹25-₹30 per litre on diesel sales and ₹10-₹14 per litre on petrol sales.

BPCL said the financial impact of current disruptions in global oil markets is expected to become more visible during the June quarter as elevated crude prices continue to influence operating costs and fuel margins.