Shafaq News- Baghdad
Chinese and Indian state refiners are struggling to secure tankers to transport Iraqi Basrah crude amid elevated freight rates following the closure of the Strait of Hormuz, which carries around 20% of global oil supplies, according to company and shipping sources cited by Reuters.
PetroChina and Indian Oil Corp (IOC) have been unable to charter very large crude carriers (VLCCs) for late June shipments from Iraq, while Chinese refiner Sinochem is also seeking tonnage. Offers for cargoes loading from Iraq's Basrah Oil Terminal between June 25 and 30 reached 650 to 750 worldscale points, a standard shipping-rate benchmark, nearly three times higher than levels prevailing before tensions between the United States, Israel, and Iran escalated in late February.
“There are tankers available, but the problem is it's too expensive and there is no guarantee you can exit the strait,” a PetroChina official remarked.
A shipping source also expected freight costs to remain high despite the recent US-Iran agreement aimed at reopening the waterway and ending military operations across all fronts, including Lebanon.
Read more: US, Iran sign remote memorandum to end war
Sinochem was still looking for a VLCC on Thursday for deliveries to Asia, while IOC received no offers in a tender issued last week for cargoes bound for Paradip port on India's east coast and later declared force majeure.
The Strait of Hormuz has remained largely closed since Feb. 28 after Iran restricted maritime traffic in response to the US-Israeli war launched against it. Washington and Tehran have since agreed to restore shipping under a memorandum scheduled to be signed in Switzerland on June 19.
Iraq, OPEC's second-largest producer, exports about 95% of its crude through southern terminals, making it particularly vulnerable to prolonged disruption in Gulf shipping. Although Baghdad is seeking to expand northern export routes through Turkiye, analysts told Reuters that infrastructure, political, and security challenges continue to constrain those alternatives.
Read more: Iraq's oil lifeline is blocked: The crisis runs deeper than Hormuz