Indian Refiners Seek Tankers for Hormuz Oil
Indian refiners are seeking chartered tankers to move crude from the Persian Gulf through the Strait of Hormuz, Bloomberg reported citing unnamed sources. Two shipping firms have won tenders for Persian Gulf cargoes while two other bids were submitted then canceled, marking a shift from previous reliance on Gulf producers and international majors to arrange shipments.
Why It Matters
The move follows a spike in freight and insurance costs after U.S. and Israeli strikes on Iran on February 28 and recent attacks on three tankers in the Strait of Hormuz, prompting refiners to reconsider how they source and transport Middle Eastern crude. Changes in shipping arrangements and use of discounted Iraqi supply could reshape India’s import mix and costs in the near term.
Key Facts
- Report source: Bloomberg citing unnamed sources (reported on by Oilprice.com)
- Tender outcomes: Two shipping companies won tenders; two other bids were canceled
- Recent security incidents: Three tankers attacked in the Strait of Hormuz this week (UK Maritime Trade Operations)
- Refiners named: Indian Oil, Reliance, Bharat Petroleum, HPCL-Mittal
- Iraq discounts: Iraq's SOMO offering discounts up to 37% to Middle Eastern benchmarks for October-loading cargoes
Indian refining companies have begun seeking chartered tankers to carry crude oil out of the Persian Gulf via the Strait of Hormuz, Bloomberg reported, citing unnamed sources. According to those sources, two shipping firms have secured tenders to carry Persian Gulf oil while two other bidders saw their tenders canceled. Until recently, Indian refiners generally avoided using domestically flagged tankers on Hormuz routes because of the heightened risk of attacks. The renewed interest in hiring tankers comes after a series of maritime security incidents in the waterway and a sharp rise in freight and insurance costs following the February 28 U.S. and Israeli strikes on Iran that helped escalate the conflict. The UK Maritime Trade Operations outlet reported three tankers were attacked in the Strait of Hormuz this week, reinforcing risk concerns for owners and operators. Previously, India’s refiners relied on Gulf-state producers and international oil majors to handle transportation, often paying significant premiums for those services. Cost considerations appear to have contributed to a shift: refiners including Indian Oil, Reliance, Bharat Petroleum and HPCL-Mittal moved toward free-on-board (FOB) purchases of Iraqi crude, putting responsibility for arranging shipping on the buyer rather than the seller. Economic incentives from Iraq have likely played a role. Iraq’s state oil marketer SOMO is offering steep discounts—reported as high as 37% against Middle Eastern benchmarks—for October-loading cargoes, making FOB purchases from Iraq more attractive despite the route through Hormuz. Industry shipping data provider Kpler also showed India’s average daily intake from Middle Eastern producers rose to about 3 million barrels in September, while imports of Russian crude fell after the U.S. warned it could impose 100% tariffs on Indian imports if refiners continued buying Russian oil; Russia nonetheless remained India’s largest single supplier at roughly 1.75 million barrels per day in September.