Russian crude has accounted for a very small portion of supply for Indian state-run refiner Hindustan Petroleum Corporation Limited (HPCL) as oil from Russia has not been economical to run at the refinery, HPCL chairman Vikas Kaushal said on the company’s earnings call.
The call took place as Indian refiners are scrambling this week for alternative supply after the U.S. sanctions on Russia’s major oil firms.
Russian crude has not been economical for HPCL regardless of grades, the executive said.
Therefore, of all the crude processed in the past quarter, Russian crude accounted for just 5% of HPCL’s total supply, he added.
“We could run Russian crudes there also, but we have alternatives with us. I’m not worried about it at all,” the executive said, referring to the procurement of crude now that Rosneft and Lukoil are off limits as Indian refiners don’t want to run afoul of the U.S. sanctions just as India is trying to have its massive 50% tariff for exports to the U.S. reduced.
Earlier this week, refiner HPCL-Mittal Energy Ltd (HMEL) — HPCL’s joint venture with Mittal Energy – became the first Indian oil company to suspend Russian crude purchases following new U.S., UK, and EU sanctions targeting Russia’s two largest oil companies, Rosneft and Lukoil.
The move marks a major shift in India’s Russian oil trade, which has surged since 2022.
Indian refiners, which import from Russia about a third of all their crude, are scrambling for alternative supply and clarity in the sanctions set to come into effect on November 21.
India’s Reliance Industries, the top private refiner in the country, is expected to stop importing crude under a long-term deal with the now-sanctioned Russian oil giant Rosneft.
Reliance Industries, one of Rosneft’s biggest clients in India, has turned to the spot market for crude oil deliveries.
India’s refiners have reportedly suspended new orders for Russian crude. The refining industry in Russia’s second-biggest crude buyer after China awaits clarity from the government about navigating the new U.S. sanction context, Reuters reported earlier this week, citing unnamed sources.
By Charles Kennedy for Oilprice.com
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