HPCL Struggles to Book Tankers for Gulf Crude Cargoes

“The main challenge has been hiring of ships,” Kaushal said in an interview in Abu Dhabi this week. “Even if we have crude available for purchase from the Persian Gulf, sometimes finding vessels for the available loading dates is a challenge.” He said a shipowner may cancel after a vessel has been contracted, saying they cannot make the voyage.

Before the war, HPCL typically collected cargoes from inside the Gulf. Vessel scarcity, war premiums and owners’ reluctance to risk the Strait have pushed the refiner toward the spot market, with deliveries arranged directly to its refineries.

More oil is moving through Hormuz, largely via ship-to-ship transfers in the Gulf of Oman. But those transfers keep supertankers occupied for weeks outside the Strait, reducing the supply of very large crude carriers (VLCCs) available for other major oil routes. Disrupted Middle Eastern loadings and the resulting tight supertanker market have also increased demand for smaller Aframax and Suezmax vessels, lifting their daily rates.

The higher freight costs can add millions of U.S. dollars to the cost of a single crude cargo, putting further pressure on oil and fuel prices.