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BPCL oil trading desk: BPCL plans an oil trading desk in Singapore, Dubai

State-run Bharat Petroleum Corporation (BPCL) is planning to open a trading desk in Singapore or Dubai to expand its global reach, sourcing, and trade in crude oil as well as finished products, according to industry officials aware of the development.

BPCL will set up the desk this year, sources added.

The Singapore desk, sources said, would also help the company trade in energy derivatives and facilitate international financing. In the international oil market, products are bought and sold through trading desks. The desk is manned by a licensed trader and trades take place instantly.

BPCL did not reply to an email sent.

“BPCL is planning to set up a trading desk as being in the center of action and knowing the ecosystem, helps you clinch better commodity deals,” said an industry official aware of the talks.

A trading desk helps companies procure crude oil from the international market on a real-time basis, helping cut import prices by locking in the best price and quality.Officials added that the Russia-Ukraine war disrupted the supply of crude oil in the market, forcing Indian refiners to look for crude sourcing options beyond the Middle East, which has been the major source of oil supplies to Indian refiners.”A trading desk will give BPCL the flexibility to enter and exit markets faster as operations are 24/7. This will enable faster turnaround on crude oil trading and ensure flexibility,” the official added.

Last fiscal, BPCL procured 38.2 million metric tonnes per annum of crude for its three refineries in Mumbai, Bina (Madhya Pradesh), and Kochi. The refineries processed five new grades of crude oils which were procured for the first time by BPCL, according to the company’s FY2023 annual report.

India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85% of its requirements.

India’s public sector refiners Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) source 70% of crude oil on term contracts and the rest on a spot basis.
This helps companies diversify their crude supply basket and address market volatility.

Term contracts are long-term oil purchase deals with fixed volumes and pricing and spot contracts are immediate purchases from suppliers.

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