BPCL buys first shipment of Russian Far East crude grade

Refiner Bharat Petroleum Corp Ltd is set to import a rare cargo of Sokol crude from Russia's Far East as it takes advantage of a regional glut to secure cheaper oil.

BPCL bought 1 million barrels of Sokol from Statoil ASA, traders said. It was BPCL's first purchase of the Russian crude grade, according to an industry source with direct knowledge the matter.

The oil is due to load in September in South Korea, where Statoil has kept the crude in storage for several months, the traders said.

Statoil declined to comment, and BPCL officials were not immediately available.

The price of the cargo is unknown, although traders said it was low enough to justify paying the shipping costs to India. The source said it looks like there is plenty of crude in the market and that's the reason Statoil offered the Sokol grade at such a competitive price.

The high-quality sweet Sokol grade usually goes to refiners in nearby South Korea and Japan.

Trading companies seeking to sell million of speculative barrels stored for months have added supply into a saturated market, putting pressure on physical crude oil markets.

It was unclear how long Statoil has held the oil in storage in South Korea. Reuters data shows the company took delivery of at least two cargoes of Sokol so far this year.

Indian state refiner Mangalore Refineries and Petrochemicals Ltd has previously processed Sokol, procured from its parent company Oil and Natural Gas Corp , which holds a stake in Russia's Sakhalin-1 development.

More Russian crude could be shipped to India after state-run Rosneft this month finalised a deal to supply 200,000 barrels per day of oil to Essar Oil Ltd , India's second biggest private refiner.

Bharat Petroleum