India’s state-owned Bharat Petroleum Corp (BPCL) and private refiner HPCL Mittal Energy Ltd (HMEL) have each bought one million barrels of Venezuelan Merey crude oil, marking BPCL’s first-ever purchase and HMEL’s first in two years, according to Reuters sources on Wednesday. The deals, arranged through trader Vitol, will increase India’s Venezuelan oil imports to at least 6 million barrels through April.
The two companies plan to load the heavy crude oil onto a single large vessel to cut shipping costs. BPCL will split its share between its Kochi refinery in Kerala and Bina refinery in Gujarat, while HMEL will process its portion at its Bathinda refinery in northern India through Mundra port.
This comes as Indian refiners are turning to Venezuelan oil as they reduce Russian imports, a strategic move that helped India secure a temporary trade agreement with the United States, according to Reuters. HMEL stopped buying Russian oil in October, though India hasn’t officially announced an end to Russian oil imports.
Other Indian companies like Reliance Industries, Indian Oil Corp, and HPCL have previously purchased Venezuelan crude at prices $6.5-$7 below the Dubai crude benchmark. Trading companies Vitol and Trafigura have been handling Venezuelan oil sales since January under US licenses, part of an agreement between Venezuela and Washington.
Venezuelan oil exports to the United States are also expected to grow in April. US refiner Valero Energy plans to receive up to 6.5 million barrels in March, while Chevron is rapidly increasing its shipments. Other US refiners are also seeking direct purchases from Venezuela.
Neither BPCL and HMEL have officially made a statement on the said deals.
