Kamal Ghorui
Looking to take advantage of the two week ceasefire window, India is urging Iran to help expedite the movement of India-bound oil ships through the Strait of Hormuz. The aim is to make sure these ships are quickly offloaded so that they can be redeployed during the current two-week ceasefire to rebuild fuel inventories, a shipping ministry official said.Despite the temporary pause in hostilities, industry executives have cautioned that a full return to normal oil trade could take at least three months. They pointed to several constraints, including slow vessel movement, limited availability of ships and insurance, loading bottlenecks, and production disruptions.
Strait of Hormuz: Several India-bound ships stuck
According to an ET report, at present, 16 India-flagged vessels remain stuck in the Persian Gulf, while eight LPG carriers have managed to pass through the Strait of Hormuz in recent weeks. In total, around 800 ships are caught in the region, and clearing this congestion is expected to take time.Although Indian refiners are keen to quickly increase supplies from the Gulf, executives warned that the recovery process will be gradual.“Until a final deal is reached, Iran is unlikely to allow traffic to normalise,” an executive said. “Even if ships move out, sending them back won’t be easy due to the risk of getting stranded again and difficulties in securing insurance.”As part of discussions around the ceasefire with the US, Iran has suggested imposing a levy on vessels passing through the Strait of Hormuz.“We have had no discussion with Iran on this issue,” MEA spokesperson Randhir Jaiswal said, adding that India expects unimpeded navigation and global trade to continue through the Strait of Hormuz.Another official noted that the US stance is not a determining factor, pointing out that the right to free movement in international waters is safeguarded under UN conventions.Executives said the ceasefire is unlikely to bring immediate relief to tight physical supplies or significantly ease spot crude prices. Although Brent futures dropped to $91 on Wednesday, a decline of about $19 following the ceasefire, refiners have still been paying between $130 and $140 per barrel in the spot market over the past month.Meanwhile, the first shipment carrying Iranian crude oil will reach India soon. This is the first time India has bought crude oil from Iran after a span of over 6 years, a move possible due to US sanctions waiver for 30 days.
