Bharat Petroleum in talks with Iranian suppliers ahead of possible crude imports: Report

State-run refiner and fuel retailer Bharat Petroleum Corporation Limited (BPCL) has reportedly begun discussions with Iranian suppliers to prepare for the possible resumption of crude oil imports if US sanctions are eased.

In an interview with Moneycontrol, BPCL finance director Vetsa Ramakrishna Gupta said the firm expects fresh crude procurement requirements from September, after its existing supply commitments end in August.

The United States has granted Iran a 60-day waiver on oil sanctions, allowing Iran to produce and sell crude oil, petrochemical and petroleum products in US dollars through August 21.

Bharat Petroleum was awaiting greater clarity on a possible agreement between Washington and Tehran that could pave the way for lifting sanctions on Iranian oil exports.

"We are in discussions with suppliers, mainly for Iranian oil. Our crude procurement is committed till August, so fresh requirements start only from September 1. Once there is clarity on the waiver being extended beyond the August 21 cut-off and an agreement between Iran and the US, we can start buying from September onwards," Moneycontrol quoted Gupta as saying.

India, the world's third-largest oil importer, stopped purchases of Iranian crude in 2019 after the United States ended sanctions waivers.

BPCL currently sources about 40% of its crude requirements from Russia.

Gupta said Russian Urals crude remains more attractive than Iranian grades because of deeper discounts.

He told Moneycontrol that Russian Urals crude is currently available at discounts of $6-$7 per barrel, while Iranian crude is expected to be offered at discounts of around $4-$5 per barrel, making Russian supplies more economical for BPCL's refineries.

Gupta also said that BPCL plans to diversify its liquefied petroleum gas (LPG) sourcing beyond West Asia and is considering countries including the United States, Angola, Argentina and Iran as future suppliers, according to the report.

He also told Moneycontrol that India's LPG storage capacity of around 8-10 days was inadequate to deal with major global supply disruptions and that discussions were underway on expanding storage capacity, including the possibility of creating strategic reserves.