Indian state-run refiners are expressing hesitancy to resume oil purchases from the Middle East, even as the Strait of Hormuz shows signs of reopening to commercial traffic. These refiners have indicated that they have secured sufficient crude oil for the next two months and are therefore not in a rush to commit to new purchases from the region. This stance comes despite requests from Middle Eastern suppliers, including Abu Dhabi National Oil Co., for Indian processors to begin taking contractual volumes under perennial supply agreements. However, these agreements have yet to be formally committed to by the Indian side.
Mangalore Refinery and Petrochemicals Ltd (MRPL) recently became the first Indian state-owned refiner to charter a vessel for Iraqi crude since the partial reopening of the Strait of Hormuz. MRPL booked the Aframax tanker Jasmin Joy to load oil from Iraq's Basrah terminal on July 19-20. This move signals a cautious re-engagement, as Indian state refiners had been facing challenges in securing vessels to load crude from ports west of the Strait of Hormuz, a critical waterway through which approximately 20% of the world's oil and gas previously transited before the disruption caused by the Israel-Iran conflict in the region.
While some oil flow continues through Hormuz, with five laden oil supertankers having been observed entering or traveling inside the strait on a route hugging Oman’s coast recently, the overall traffic remains low. Data from LSEG showed only four vessels, down from eight the previous day, crossing on a recent Sunday. Despite these disruptions and varying narratives from the U.S. and Iran regarding the strait's status, some Indian tankers have re-emerged, suggesting a slow uptick in traffic. However, the cautious approach of Indian refiners highlights ongoing concerns about the safety and reliability of shipping routes in the region.
