Bharat Petroleum Corporation Ltd (BPCL), the second largest Indian Oil Marketing Company, secured one-year term deals for Iraqi and Omani crude grades as Indian refiners pivot back toward Middle Eastern suppliers to mitigate the impact of tightened sanctions on Russian oil.

In addition to the Iraqi and Omani agreements, the state-run refiner is actively seeking additional volumes of Murban crude from the United Arab Emirates (UAE) through a separate tender.

This shift in procurement strategy follows a significant tightening of US sanctions on October 22, 2024, which targeted Russia’s primary oil producers, Rosneft and Lukoil. The US Treasury Department mandated that all existing transactions with these entities be wound down by November 21, forcing global refiners to seek alternative feedstocks or face secondary penalties.

Several Indian refiners, including Hindustan Petroleum, Mangalore Refinery and Petrochemicals, and private venture HPCL-Mittal Energy, have already halted Russian crude purchases to avoid sanction exposure. Trade data indicates that India’s imports of Russian oil fell to a two-year low in December, while the Organization of the Petroleum Exporting Countries’ (OPEC) share of the Indian market surged to an 11-month high.

To ensure energy security, Indian refiners are also diversifying their portfolios beyond the Middle East. Procurement from Africa and South America is expanding, alongside increased volumes of US crude and the exploration of potential imports from Venezuela.