MRPL boosts delivered oil buying as Iran war raises shipping risks

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The Economic Times daily newspaper is available online now. Read Today's Paper MRPL boosts delivered oil buying as Iran war raises shipping risksReutersLast Updated: Nov 04, 2026, 02:27:00 PM ISTSynopsis

Mangalore Refinery and Petrochemicals Ltd plans to increase crude oil purchases on a delivered basis. This strategy aims to reduce shipping risks related to the ongoing Iran war. The company is also looking to diversify its crude sourcing to maintain full refinery capacity. CFO Devendra Kumar expressed hope for annual supply deals with Middle Eastern oil producers. Additionally, MRPL's fuel exports may decline as local consumption is projected to rise.

New Delhi: India's Mangalore Refinery and Petrochemicals Ltd (MRPL) is increasing crude oil purchases on a delivered basis to reduce its exposure to shipping risks stemming from the Iran war and cut freight costs, its head of finance said on Wednesday.

Attacks by Iranian forces on vessels transiting the Strait of Hormuz during the eight-month-long conflict have prompted Middle Eastern producers to offer more crude through ship-to-ship transfers outside the waterway, while also offering freight discounts on delivered-basis supplies. Under delivered-at-port (DAP) agreements, the supplier bears contractual responsibility for delivering the cargo to its destination.

"To de-risk, we would continue to insist on DAP cargoes, but going forward we will evaluate purely based on our delivered economics when things stabilise," MRPL CFO Devendra Kumar said at an analyst meeting.

The state-run refiner is diversifying its crude sourcing to operate its 300,000 barrels-per-day refinery in southern Karnataka state at full capacity.

MRPL met about a fifth of its crude oil requirements from the Middle East and around a third from Russia in the September quarter, Kumar said. Domestic crude accounted for about a quarter of its requirements, while it sourced the remainder from regions including West Africa and the Americas, he added.

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Kumar said he hopes some Middle Eastern oil producers will offer delivered cargoes under annual supply deals, marking a shift from the traditional free-on-board arrangements, where buyers arrange shipping.

"Our estimate is going forward that some form of these variations which are being brought in now (by the producers) would be available in future also," he said.

MRPL's priority is to meet local fuel demand, Kumar said, adding that the company's fuel exports could decline over the next couple of months with Indian fuel consumption rising.
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