Indian state refiners are back to buying Iraqi crude that would have to transit the Strait of Hormuz, in a sign that the world’s third-largest crude oil importer seeks to bring supply from the Middle East after the tentative reopening of the chokepoint.
State-owned Mangalore Refinery and Petrochemicals Limited (MRPL), which operates a 300,000-barrels-per-day refinery in southern India, has chartered a tanker to load crude from Iraq, sources from the shipping industry told Reuters on Tuesday. This is the first Indian state refiner to charter a vessel to ship crude out of Iraq since the tankers began to move inbound into the Strait a few weeks ago.
MRPL has booked an Aframax tanker, the Jasmin Joy, to load crude from Iraq’s Basrah oil terminal deep in the Persian Gulf on July 19-20, according to Reuters’ sources.
India has been trying for weeks to charter vessels, and has struggled with this endeavor amid high freight costs and still uncertain terms and conditions under which the Strait of Hormuz transits operate.
At the end of June, Indian Oil Corporation (IOC), the biggest refiner in the country, did not receive any bids in a tender to charter three tankers to pick up crude and gas from the Persian Gulf and ship the volumes through the Strait of Hormuz.
Since the Strait tentatively reopened, vessel traffic has picked up, especially for outbound tankers that have been stuck for months in the Gulf. But many shipowners and operators remain very cautious about their willingness to send tankers inbound through the Strait into the Persian Gulf to pick up cargoes.
Meanwhile, TotalEnergies is reportedly offering millions of barrels of Iraq’s Basrah Medium and Basrah Heavy crudes for prompt delivery to Asia this month and next. TotalEnergies, one of the top commodity traders among Big Oil, is offering to buyers in China, South Korea, and Taiwan unspecified volumes of the Iraqi crude which the supermajor would load from Basrah and have delivered through the Strait in the coming weeks.
By Tsvetana Paraskova for Oilprice.com