Indian refiner Bharat Petroleum Corp has bought 2 million barrels of extra Saudi oil for loading in April after the Saudi Kingdom slashed the selling price and announced plans to raise output to record 12.3 million barrels per day (bpd), as per a Reuters news report.
“We will be taking two additional cargoes of Arab mix…we have got a mix of Arab light and Arab medium,” BPCL’s head of refineries R. Ramachandran told Reuters. He said his company is also exploring buying additional oil from United Arab Emirates.
UAE national oil company ADNOC said it would raise crude supply to more than 4 million bpd in April and would accelerate plans to boost its capacity to 5 million bpd, a target it previously planned to achieve by 2030.
The extra oil the two Gulf allies plan to add is equivalent to 3.6 per cent of global supplies and comes at a time when global fuel demand in 2020 is forecast to contract for the first time in almost a decade due to the coronavirus outbreak.
It may be recalled that the government of India intends to sell its stake in BPCL. A steep correction in stock markets, as well as in crude oil prices, may not be good news for the government’s plan to divest Bharat Petroleum Corporation (BPCL).
After initial euphoria, concerns had erupted on what valuations the stock could garner if BPCL’s Numaligarh refinery was not part of stake sale. But the correction in the broader indices, against the backdrop of global slowdown concerns led by coronavirus outbreak, has been a major reason for further correction in BPCL’s stock price.
The weakness and lower appetite for equities and investors seeking safe havens are not a favourable time for any stake sale. Since the same can have a bearing on valuations, the stake sale may garner lower funds for the government. This also means the divestment process may get delayed, feel experts.