BPCL seeks $10-12 per barrel discount on Venezuelan crude for viability

The refiner is now able to process heavy Venezuelan crude at its Kochi and Bina refineries, following upgrades that have enhanced the complexity of its refining system

State-owned Bharat Petroleum Corporation (BPCL) is seeking discounts in the range of $10–12 per barrel for the purchase of Venezuelan crude to ensure commercial viability, two senior officials aware of the development said. If approved, this would mark BPCL’s first-ever purchase of Venezuelan crude, for which Indian refiners are seeking steeper discounts as its highly viscous and acidic nature makes it difficult to process.

 

“Some Venezuelan crude is lighter while others are heavier; we need to see which crude is being offered. We had earlier sampled some (Venezuelan) crude and we have initial estimates (on discounts) that we require for commercial viability. A final decision has not been made yet,” one of the officials said.

 

 

With upgrades that have enhanced the complexity of BPCL’s refineries, the company is now able to process heavy Venezuelan crude at its Kochi and Bina refineries, the second official said. The upcoming Andhra Pradesh refinery would also be able to process Venezuelan crude, he added. Queries sent to BPCL remained unanswered at the time of publishing.

 

Mukesh Ambani-backed Reliance Industries (RIL) and Russia-backed Nayara Energy were the top Indian buyers of Venezuelan crude prior to US sanctions imposed on Caracas. Historically, Indian state-run refiners have not processed Venezuelan crude, with only limited volumes supplied to Indian Oil.

 

Besides BPCL, Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil have also confirmed their capability to process Venezuelan crude. These companies would blend heavy Venezuelan crude with lighter grades to process it.

 

US President Donald Trump, after capturing Venezuelan President Nicolás Maduro, said American oil companies would “rebuild the oil infrastructure” of the South American nation. Global trading houses Vitol and Trafigura obtained the first US licences to load and export Venezuelan oil.

 

Venezuela produces only about 0.8 per cent of global crude output despite holding 18 per cent of the world’s oil reserves, reflecting years of underinvestment and infrastructure constraints. China and the US are currently the largest buyers of Venezuelan oil.

 

In a related development, BPCL on Thursday signed a landmark crude oil supply agreement with commodities group Trafigura at the India Energy Week event in Goa. Trafigura has been awarded a tender to supply Iraq Basrah and Oman crude oil to BPCL on a term basis, and the delivery will begin in April 2026.

 

This marks the first agreement of its kind for BPCL for imports of Basrah crude, representing a strategic milestone in its procurement approach, the company said in a statement. By leveraging market opportunities, BPCL wants to ensure a reliable and cost-effective supply of crude oil for its refining system.