Amidst the tension between America and Iran and the ongoing crisis in the Middle East, Bharat Petroleum Corporation Limited (BPCL) has taken up the task of bringing oil from Iraq through Hormuz.
Bharat Petroleum bringing oil from Iraq.
State-owned oil refiner Bharat Petroleum Corporation Limited (BPCL) has chartered a tanker to transport Iraqi crude oil through the Strait of Hormuz. This operation poses significant risks for BPCL due to the ongoing US-Iran tensions and the Middle East crisis.
Oil is coming to India amidst threats.
This is BPCL's first purchase of oil from Iraq in the fiscal year beginning April 1, 2026. BPCL purchased one million barrels of crude oil from Iraq's state-owned oil marketing company, SOMO. This is the first Iraqi shipment to arrive in India through the Strait of Hormuz since the fighting between the US and Iran began in late February.
The deal between the two companies is on a free-on-board (FOB) basis. This means that the buyer, BPCL, is not solely responsible for transporting the oil safely from its terminal in Iraq to India.
Iraqi oil via India
BPCL Director (Finance) Vetsa Ramakrishna Gupta stated that the ship has successfully transited the Strait of Hormuz. Due to security concerns, the oil is being transferred to other, safer vessels off the coast of Fujairah in the United Arab Emirates via ship-to-ship transfer technology, rather than directly to an Indian port, where it will be brought to India.
What will the company gain in exchange for the risk?
Iraq was India's second-largest oil supplier before the war in West Asia disrupted supplies. According to media reports, Iraq's oil is stuck inside terminals due to the war and the Strait of Hormuz blockade. To woo refiners and traders, Iraq is offering a discount of $25 to $30 per barrel on its August-loading Basra crude compared to the Dubai benchmark.
The company chief further said, "Once we are successful with this route, probably from next month we can plan to bring some more cargo from SOMO and other sources available on this side."
