BPCL snaps up 500 mn barrels of crude on distress sale

State-run refiner Bharat Petroleum Corporation Ltd (BPCL) has procured 500 million barrels of distress crude oil at a discount of $3-5 per barrel this month after coronavirus-hit China cancelled the order, according to reports.

"We have bought 500 million barrels of what we call opportunity crudes from distress sale in February. Price is so attractive it is coming at $3-5 per barrel cheaper than the already low prices, which is trading at under $50 a barrel," reporta cited R Ramachandran, director of refineries at BPCL, as saying.
The outbreak of the epidemic, which left more than 2,660 dead and over 77,600 infected in China alone and has spread to countries like Korea, Japan, Iran and far-flung nations like Italy and France, has pushed down crude prices by over $15 a barrel to around $50 now.
China, the largest importer and consumer of crude, has reduced or cancelled orders for crude after Beijing-ordered a lockdown and millions of factories remained closed.
BPCL, however, is unlikely to buy more such crude as it keeps an inventory cycle of 30-40 days.
BPCL, which has been the biggest customer of US crude since the last two years, has also bought huge inventory of crude from that country.
The refiner imported 1.6 million tonnes of crude from the US in FY19, and another 1.57 million tonne this fiscal so far, making it the largest customer for the US crudes from the country.
The price of crude has already fallen to $55 from $70 in early January due to spread of coronavirus. 
Meanwhile, a report quoting the visiting US energy secretary Dan Brouillette said in the past two years, Indian imports of crude from the US has jumped 10-fold to 2,50,000 barrels a day, from just 25,000 barrels per day in 2017.
The Middle East, however, remains the main source for crude for India, with Iraq emerging the country’s top crude oil supplier, meeting close to one-fourth of oil needs. India bought 26 million tonnes of crude from Iraq in April-September, pushing Saudi Arabia to the second spot with 20.7 million tonnes. 
Indian refiners have imported 111.4 million tonnes of crude oil from April to September 2019.