Hindustan Petroleum Corporation Limited (HPCL), a major Indian state-owned refiner, is struggling to hire tankers to transit the Strait of Hormuz and pick up cargoes in the Gulf, chairman Vikas Kaushal has told Bloomberg.
Despite the recovery of crude oil flows from the Gulf via Hormuz to nearly pre-war levels, buyers continue to struggle with scarce vessel availability and last-minute decisions by shipowners not to brave the Strait to load crude oil from inside the Persian Gulf.
“The main challenge has been hiring of ships. Even if we have crude available for purchase from the Persian Gulf, sometimes finding vessels for the available loading dates is a challenge,” Kaushal told Bloomberg in an interview in Abu Dhabi this week.
“Sometimes the ship is contracted and then at the last minute the shipowner says I can’t do it,” the executive from the Indian refiner added.
Before the war, HPCL would usually pick up cargoes from inside the Gulf, but vessel scarcity, war premiums, and shipowners unwilling to risk transits have now forced it to pivot to the spot market and arrange for deliveries directly at its refineries.
The increased flows of oil from the Strait of Hormuz, mostly thanks to ship-to-ship (STS) transfers in the Gulf of Oman, are tying up supertankers for weeks waiting for the transfers outside the Strait, limiting the availability of very large crude carriers (VLCCs) for the other global key oil trade routes.
The inefficient oil loadings in the Middle East and the very tight supertanker market resulting from these have created a ripple effect extending to the market of smaller vessels, Aframax and Suezmax, whose demand and daily rates have also surged amid a shortage of supertankers.
Sky-high rates add millions of U.S. dollars to the cost of a single crude oil cargo, further fueling oil and fuel prices.
By Tsvetana Paraskova for Oilprice.com
