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India faces higher crude costs as Hormuz shipping rates jump
Freight on the Ras Tanura to India VLCC route surged 411% to $4.34 a barrel in August, while war-risk insurance for a single Hormuz passage rose to as much as $10 million.
Oilprice reports that India’s crude oil import bill has surged after the Iran war disrupted Middle Eastern supply and pushed up both benchmark crude prices and the cost of moving cargoes to India.
According to Oilprice, freight rates on a key Ras Tanura, Saudi Arabia to India route rose more than 400% since the war began on February 28, after Iran closed the Strait of Hormuz.
Oilprice cites data compiled by Financial Express showing the rate for shipping crude on a VLCC from Ras Tanura to India jumped 411% to $4.34 a barrel in August, compared with $0.85 per barrel before the war.
The outlet also notes that war-risk insurance for a Hormuz voyage increased from about $250,000 before the war to as much as $10 million for a single passage, and that freight for other routes into India has climbed as well.
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