MRPL Shifts to Delivered-Basis Crude Purchases amid Iran War Risks
ECONOMY & POLICY

MRPL Shifts to Delivered-Basis Crude Purchases amid Iran War Risks

India’s Mangalore Refinery and Petrochemicals (MRPL) is increasing crude oil purchases on a delivered basis to reduce exposure to shipping risks linked to the Iran war and lower freight costs, its chief financial officer said. The Karnataka-based refiner is also diversifying supplies to keep its 300,000 barrels-per-day refinery operating at full capacity.

Attacks by Iranian forces on vessels travelling through the Strait of Hormuz during the eight-month conflict have encouraged Middle Eastern producers to offer more crude through ship-to-ship transfers outside the waterway. Producers are also offering freight discounts on delivered-basis supplies. Under delivered-at-port (DAP) agreements, the supplier is contractually responsible for delivering the cargo to its destination.

MRPL will continue to prioritise DAP cargoes, while evaluating purchases on the basis of delivered economics as market conditions stabilise, chief financial officer Devendra Kumar said at an analyst meeting. The refiner’s approach is intended to limit exposure to disruptions in shipping routes and changes in freight costs.

MRPL sourced about a fifth of its crude oil requirements from the Middle East and around a third from Russia in the September quarter. Domestic crude accounted for about a quarter of its requirements, while the balance came from regions including West Africa and the Americas.

Kumar said some Middle Eastern producers could offer delivered cargoes under annual supply agreements, representing a shift from traditional free-on-board arrangements in which buyers organise shipping. He indicated that variations introduced by producers during the current disruption could remain available in the future.

MRPL’s immediate priority is to meet domestic fuel demand, Kumar said. The company’s fuel exports could therefore decline over the next couple of months as Indian fuel consumption increases, even as the refiner maintains efforts to secure diverse crude supplies and sustain refinery utilisation.

India’s Mangalore Refinery and Petrochemicals (MRPL) is increasing crude oil purchases on a delivered basis to reduce exposure to shipping risks linked to the Iran war and lower freight costs, its chief financial officer said. The Karnataka-based refiner is also diversifying supplies to keep its 300,000 barrels-per-day refinery operating at full capacity. Attacks by Iranian forces on vessels travelling through the Strait of Hormuz during the eight-month conflict have encouraged Middle Eastern producers to offer more crude through ship-to-ship transfers outside the waterway. Producers are also offering freight discounts on delivered-basis supplies. Under delivered-at-port (DAP) agreements, the supplier is contractually responsible for delivering the cargo to its destination. MRPL will continue to prioritise DAP cargoes, while evaluating purchases on the basis of delivered economics as market conditions stabilise, chief financial officer Devendra Kumar said at an analyst meeting. The refiner’s approach is intended to limit exposure to disruptions in shipping routes and changes in freight costs. MRPL sourced about a fifth of its crude oil requirements from the Middle East and around a third from Russia in the September quarter. Domestic crude accounted for about a quarter of its requirements, while the balance came from regions including West Africa and the Americas. Kumar said some Middle Eastern producers could offer delivered cargoes under annual supply agreements, representing a shift from traditional free-on-board arrangements in which buyers organise shipping. He indicated that variations introduced by producers during the current disruption could remain available in the future. MRPL’s immediate priority is to meet domestic fuel demand, Kumar said. The company’s fuel exports could therefore decline over the next couple of months as Indian fuel consumption increases, even as the refiner maintains efforts to secure diverse crude supplies and sustain refinery utilisation.

Related Stories

Gold Stories

Next Story
Equipment

BorgWarner secures three turbocharger contracts with global powertrain leader

BorgWarner has secured three new turbocharger contracts with a global powertrain technology company. The wins comprise one contract for its variable turbine geometry (VTG) turbocharger and two for its wastegate turbocharger. The technologies will be deployed in the customer's light-vehicle gasoline platforms in South America and Europe, with production scheduled to begin in 2027.The VTG turbochargers are designed for gasoline engines operating under demanding conditions and high-boost pressure requirements. They are engineered to support Miller-cycle engines and withstand exhaust temperatures ..

Next Story
Infrastructure Transport

International Digi Yatra Trials Begin at Seven Airports

India has begun trials of Digi Yatra for international passengers at seven airports, allowing eligible Indian passport holders to use facial recognition at selected airport checkpoints. The facility is currently limited to Indian nationals with e-passports travelling on selected international flights operated by Air India and IndiGo. The Civil Aviation Ministry announced the trials on 1 November, with testing scheduled through December 2026. A wider rollout is expected in 2027 after the ministry assesses passenger feedback gathered during the trial period, according to PTI. The system is inten..

Next Story
Infrastructure Transport

Air India Plans More Wide-Body Jets, CEO Signals Profitability Soon

Air India is seeking to expand its order for wide-body aircraft as it works to increase international passenger traffic, chief executive Tewolde Gebremariam said on Tuesday. The Tata Group-owned carrier is also targeting a return to profitability in the near term, as its turnaround programme addresses fleet, network and service challenges. The comments came months after Gebremariam took charge of the airline. Gebremariam, who previously led Ethiopian Airlines, said the airline wanted more wide-body aircraft. Air India has held discussions with Boeing and Airbus while assessing the economics of..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code