Reliance Pays Record Rate for Iraqi Oil Tanker
Reliance Industries has agreed to pay a record $23 million to $25 million to charter a supertanker to transport Iraqi crude to India, highlighting soaring shipping costs and a severe shortage of vessels willing to operate in the Gulf amid regional tensions.
Reliance Books Supertanker at Record Price
Reliance has chartered a very large crude carrier from South Korea’s Sinokor to transport around 2 million barrels of Iraqi oil later this month.
The agreed freight rate is equivalent to around 1,200 Worldscale points, roughly 12 times the benchmark shipping rate. Before the regional conflict disrupted Gulf shipping, a comparable voyage could cost around $2 million.
The unusually high price reflects the limited availability of tankers prepared to navigate the Strait of Hormuz and surrounding waters.
Iraqi Crude Discounts Offset Shipping Costs
Despite the record freight expense, Reliance could still benefit from substantial discounts being offered on Iraqi crude.
Iraq’s state oil marketer has reportedly offered some crude grades at discounts of around $25 to $30 per barrel against Dubai benchmark prices to attract buyers amid difficulties transporting oil from the Gulf.
The discounted crude could therefore partially offset Reliance’s sharply higher transportation costs.
Gulf Shipping Costs Surge
Shipping availability across the Gulf has tightened considerably as shipowners assess security risks associated with operating near the Strait of Hormuz.
Several Indian and Chinese refiners have sought tankers for Iraqi crude, but securing vessels has become increasingly difficult.
Reliance operates the world’s largest refining complex at Jamnagar in Gujarat and imports crude from multiple international suppliers to meet its refining requirements.
