BPCL Turns To Abu Dhabi Crude As U.S. Sanctions Tighten On Russian Oil

India’s Bharat Petroleum Corporation Ltd (BPCL) has begun redrawing its crude supply lines, turning to Abu Dhabi for a new cargo after Washington widened sanctions on two of Russia’s biggest oil producers.

As per Reuters, BPCL recently bought 2 million barrels of Upper Zakum crude from Abu Dhabi National Oil Company (ADNOC) through a spot tender for loading in December. The cargo, according to one of the sources, will be supplied by ADNOC Trading itself.

The move came within days of the U.S. placing fresh restrictions on Rosneft and Lukoil, Russia’s two largest oil companies. The measures, part of efforts to pressure Moscow over the war in Ukraine, have complicated how refiners source and pay for Russian crude.

As U.S. sanctions tighten, will Indian refiners rework their sourcing strategy?

Why Has BPCL Shifted Away From Russian Barrels?

For BPCL, the change is pragmatic. A company source told Reuters last week that the refiner would now buy Russian barrels only from non-sanctioned entities, a stance aimed at staying clear of banking and insurance hurdles.

On paper, BPCL’s oil purchases look vast: nearly 2 million metric tonnes (around 14.7 million barrels) of crude are bought every month from the spot market. Much of that is Russian. The company now plans to split that volume roughly in half, continuing with non-sanctioned Russian cargoes while sourcing the rest from non-Russian suppliers.

Why Upper Zakum Works

Upper Zakum, a medium-sour grade from Abu Dhabi’s offshore fields, is familiar territory for Indian refiners. It behaves much like Russia’s Urals blend and fits BPCL’s refinery configuration without technical tweaks.

ADNOC’s readiness to supply through its trading arm gave BPCL a quick replacement option just as compliance risks grew around Russian crude.

India’s Tightrope

India imports more than 85% of its crude needs, leaving refiners heavily exposed to supply disruptions. Russian oil, often sold at double-digit discounts, had offered a cushion since 2022. But as restrictions on shipping and insurance have expanded, refiners have had to find new balances. For state-owned firms like BPCL, compliance isn’t optional - yet neither is cheap, reliable crude. That dual pressure is now shaping every tender and trade decision.

New Delhi’s position remains consistent: India will buy wherever it gets the best terms, as long as it breaks no law. In practice, though, refiners face day-to-day challenges that diplomacy alone can’t solve - payment channels, freight insurance, and approval from Western banks.

Reading The Market Reaction

Investors appeared to take the news in stride. BPCL’s shares opened at ₹361.95 on November 3, touched a high of ₹369.50, and closed slightly lower at ₹356.25, against the previous close of ₹356.80. By 9:30 AM on November 4, the stock had opened stronger at ₹371.90, suggesting no market anxiety over supply. In trading rooms, the sentiment was that BPCL’s swift deal-making showed competence more than concern. The refiner kept its feedstock flow steady while navigating sanctions that could easily trip up slower players.

What’s Next

The Abu Dhabi purchase may look routine, but it hints at a broader pattern: Indian refiners are spreading risk, one cargo at a time. Each new tender now doubles as a stress test for how flexible their supply chains can be.

If sanctions deepen or freight costs rise, Middle-East grades like Upper Zakum could take on even more importance. Meanwhile, non-sanctioned Russian sellers will still have a place, as long as they remain outside the restrictions.

For BPCL, the goal isn’t to replace Russia completely – it is to keep refineries running without disruption, whatever the political weather.

One question will hang over every new deal - can India keep its oil flowing freely in a world where politics moves faster than trade?

Sources

Reuters
Reuters2
Business Standard
Times of India
Reuters3
DD News
NSE India