India's Oil Import Bill Soars as Hormuz Shipping Rates Skyrocket
India's crude oil import bill has skyrocketed due to the ongoing Iran war in the Middle East. The conflict has disrupted oil supplies, causing a surge in benchmark crude prices and freight rates.
The cost of shipping crude from Ras Tanura on Saudi Arabia's Persian Gulf to India has increased by 411% since February 28, when the war began, according to data compiled by Indian outlet Financial Express. The rate for shipping crude on a very large crude carrier (VLCC) surged to $4.34 per barrel in August, up from just $0.85 per barrel before the war.
The cost of shipping non-Middle Eastern cargoes has also risen sharply amid increased demand for barrels not needing the Strait of Hormuz to reach India. The Corpus Christi-India freight rates jumped by 150% to $15.86 per barrel from $6.35 per barrel pre-war, while the cost to transport crude oil from Russia's Ust-Luga port on the Baltic Sea on Suezmax tankers more than doubled to $19.90 per barrel from $8.40 per barrel in February.