India’s Crude Import Bill Surges as Hormuz Shipping Rates Soar
India’s crude oil import bill has soared since the Iran war choked Middle Eastern oil supply, raised benchmark crude prices, quadrupled freight rates, and boosted insurance on a single Strait of Hormuz voyage to never-before-seen highs. India has been paying elevated prices to import Middle Eastern crude not only because of the spike in oil prices, but also due to the surging costs to bring supply from the nearest region from which it can import crude.
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Key Facts
- Fact 1: The freight rates on the key route from Ras Tanura on Saudi Arabia’s Persian Gulf to India have soared by more than 400% since February 28, when the war began, and Iran closed off the Strait of Hormuz.
- Fact 2: The rate for shipping crude on a very large crude carrier (VLCC) from Ras Tanura to India surged by 411% to $4.34 a barrel in August, from just $0.85 per barrel before the war, according to data compiled by Indian outlet Financial Express.
- Fact 3: The Corpus Christi-India freight rates have jumped by 150% to $15.86 a barrel from $6.35 a barrel pre-war, while the cost to transport crude oil from Russia’s Ust-Luga port on the Baltic Sea on Suezmax tankers has more than doubled to $19.90 a barrel from $8.40 per barrel in February.
- Fact 4: dollars for a Hormuz voyage before the war, to up to $10 million for a single passage through the chokepoint now.
India’s crude oil import bill has soared since the Iran war choked Middle Eastern oil supply, raised benchmark crude prices, quadrupled freight rates, and boosted insurance on a single Strait of Hormuz voyage to never-before-seen highs. India has been paying elevated prices to import Middle Eastern crude not only because of the spike in oil prices, but also due to the surging costs to bring supply from the nearest region from which it can import crude.
The freight rates on the key route from Ras Tanura on Saudi Arabia’s Persian Gulf to India have soared by more than 400% since February 28, when the war began, and Iran closed off the Strait of Hormuz. The rate for shipping crude on a very large crude carrier (VLCC) from Ras Tanura to India surged by 411% to $4.34 a barrel in August, from just $0.85 per barrel before the war, according to data compiled by Indian outlet Financial Express. The cost of shipping non-Middle Eastern cargoes has also soared amid a spike in demand for barrels not needing the Strait of Hormuz to reach India.
(Original synthesis pending human/AI review — generated by the stub provider by selecting real sentences from the source material, not by writing new analysis or commentary.)
Original source: OilPrice.com
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