Hormuz Risk Escalates: Two Major Indian Refiners Suspend Iraqi Crude Loadings
Alina Collins
Indian Oil Corp. and Mangalore Refinery have suspended Iraqi crude loadings as Strait of Hormuz attacks intensify; a 2-million-barrel supertanker has been abandoned, signaling that Persian Gulf export lanes are narrowing.
What happened?
Indian Oil Corp. scrapped plans to load the supertanker *Lila Jamnagar*, which can carry up to 2 million barrels.
Mangalore Refinery & Petrochemicals (controlled by ONGC) also halted Iraqi liftings, citing deteriorating security.
This means → India's two largest state-owned refiners stopped at the same time. The signal is clear: shipowners no longer want to risk the strait.
Why are shipowners refusing to sail?
Iran has attacked multiple oil tankers transiting the Strait of Hormuz in recent days, aiming to tighten its grip on the waterway.
Some vessels switched off their AIS transponders — the onboard tracking signal — to slip through undetected, but they were reportedly attacked anyway.
In plain terms = lights on or lights off, you can still get hit. Shipowners face a no-win choice.
What does this mean for Indian refiners?
India's state refiners typically buy Iraqi crude on long-term contracts that require the buyer to arrange shipping.
This means → all security risk and rising freight costs fall on the buyer. The more dangerous the strait, the higher the landed cost.
India's shipping ministry has ordered a halt: no Indian-national seafarers may be deployed on vessels transiting Hormuz until further notice.
What to watch next?
When Indian refiners resume loadings depends entirely on whether security in the Strait of Hormuz improves.
This reflects a bigger question: whether Persian Gulf crude export volumes can recover — Hormuz is the bottleneck.
In plain terms = roughly one-fifth of global oil trade passes through this waterway. If it stays choked, oil prices face upward pressure.
Content is for reference only, not financial advice.