India plans to send empty tankers into the Strait of Hormuz to load oil supplies from the Gulf producers in a first such Indian move west of the chokepoint for loading crude and LPG since the Iran war began, sources with knowledge of the matter told Bloomberg on Wednesday.
Despite the closed Strait of Hormuz, which has now been nearly inaccessible for 80 days, India has seen some shipments out of the Gulf pass through the critical chokepoint, likely with the blessing of both Iran and the U.S., which have been separately blockading the shipping lane that handled 20% of global daily oil and LNG flows before the war.
India has boosted imports of oil and LPG from places that don’t need the Strait of Hormuz, but costs are usually higher, and the journey times are much longer compared to the shorter routes from the Persian Gulf to India.
The world’s third-largest crude oil importer has been leaning heavily on Russian oil loaded on tankers, which is being exempted from sanctions by the U.S. via waivers renewed at regular intervals over the past two months.
Indian vessels will begin to attempt to move into the Gulf via Hormuz as soon as the Indian government gives the final approval to the plan to send tankers for supplies, according to Bloomberg’s anonymous sources, who didn’t specify timing or volumes that could be involved in the attempted loading of energy cargoes.
At any rate, India will likely need approval from the U.S. to move through the U.S. blockade in the Gulf of Oman first, and then from Iran for clearance in the Strait of Hormuz en route to the export ports in the Persian Gulf.
Meanwhile, Moody’s said earlier this week that “We expect oil importers — particularly China, India, Japan and Korea — to negotiate passage bilaterally with Iran, potentially through coordinated transit corridors such as those reportedly emerging near Larak Island and through Omani territorial waters.”
Signs have already emerged that Iran is allowing passage through Hormuz on a case-by-case basis.
By Tsvetana Paraskova for Oilprice.com
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