Indian Oil Refiners Shift Logistics Strategy to Bypass Hormuz Premiums

Indian oil refiners including Indian Oil Corp. and Reliance Industries are hiring their own tankers to transport crude through the Strait of Hormuz, abandoning the previous practice of relying on international traders for cost-and-freight deliveries. This strategic shift aims to reduce high premiums and secure supply chains amid regional volatility. Refiners are increasingly purchasing Iraqi crude on a free-on-board basis, requiring them to manage shipping logistics directly. The move follows a relaxation in government advisories regarding Indian crew on these routes and follows significant discounts offered by Iraq’s state-owned marketer, SOMO. Consequently, September oil flows from the Middle East to India reached 1.3 million barrels per day.

Editor's note: The article accurately conveys the strategic shift in logistics and the motivations behind Indian refiners' recent actions.

This article is AI-generated and fact-gated. Original reporting: Business Standard