Disruptions in the Strait of Hormuz: State-Run Refiners Halt Iraqi Oil Lifting Amid US-Iran Tensions
Renewed tensions between the US and Iran have led to significant disruptions in the Strait of Hormuz, prompting two Indian state-run refiners to cancel their Iraqi crude oil shipments. The Strait, a critical transit route for nearly one-fifth of the world’s energy supplies, has effectively been closed due to escalating security concerns and attacks on vessels in the area.
Iraq Oil Shipments Cancelled
Indian Oil Corporation (IOC) has halted its plans to lift Iraqi crude from the Basrah Oil Terminal. The decision comes amid heightened security risks in the Strait of Hormuz. IOC was scheduled to load approximately 2 million barrels of Iraqi crude onto the Very Large Crude Carrier (VLCC) Lila Jamnagar around July 23.
Mangalore Refinery and Petrochemicals Ltd (MRPL) has also cancelled its plans to procure Iraqi crude using the Indian-flagged Aframax tanker Desh Gaurav. Iraq has historically been one of India’s largest crude oil suppliers, but shipments have significantly declined since the onset of the US-Iran conflict. Data from Kpler indicates that India’s average imports from Iraq fell from 235,000 barrels per day to zero in April, with only minor recoveries in May and June.
In response to the escalating conflict, India has advised shipowners and recruitment agencies against deploying Indian seafarers in the Strait of Hormuz. The country’s shipping regulator has instructed vessel masters to remain vigilant and monitor the evolving security situation in the Persian Gulf and surrounding waters. Regional tensions have intensified since the collapse of a fragile truce between Washington and Tehran in early July, leading to further disruptions in shipping through this strategic waterway.
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