ع
India’s Reliance Industries has paid a record sum of $23 million to $25 million to charter a supertanker for Iraqi crude, three shipping sources told Reuters. The deal covers 2 million barrels loading at 1,200 World Scale, representing 12 times the standard benchmark rate for such a voyage. This arrangement comes as vessel availability tightens in the Persian Gulf due to regional conflict.
Shipping volumes through the Strait of Hormuz have dropped well below the pre-conflict daily average of 125 to 140 vessels, according to figures referenced in the Reuters report. The war involving Iran that began at the end of February has prompted many operators to avoid the route, limiting options for crude purchasers. Ship brokers cited by the news agency described the charter as among the highest costs recorded since the disruptions started.
A Reuters document reviewed earlier this week showed that Iraq’s state oil marketer SOMO is offering discounts of $25 to $30 per barrel to Dubai benchmarks to encourage buyers to lift cargoes from terminals inside the strait. Reliance is still projected to save millions overall on the purchase despite the freight expense, the sources added, thanks to the steep concessions from SOMO. The tanker will be supplied by South Korea’s Sinokor, one of the few owners that continue to send vessels through the area.
Reliance operates the world’s largest single-site refining complex at Jamnagar in Gujarat, where company data places daily processing capacity at 1.4 million barrels. The facility has expanded its use of Iraqi grades to capitalise on available discounts as global supply dynamics shift. Neither Reliance nor Sinokor responded to comment requests from Reuters.
Other Indian and Chinese refiners have also sought tankers this week to load discounted Basrah crude, shipping sources told Reuters, yet many owners have held back from finalising fixtures over security worries. Iraq remains a significant supplier to Indian refineries, supporting efforts to secure cost-effective feedstocks. The situation illustrates the logistical strains facing Asian buyers navigating current maritime conditions.
Prior to the conflict, comparable voyages typically cost about $2 million at 0.8 to 0.9 times the World Scale benchmark, according to broker calculations shared with Reuters. The latest transaction underscores how risk premiums have altered freight economics for Gulf shipments. Market participants continue to track whether additional operators will re-enter the route as discounts persist.
