Iran's Revolutionary Guards have confirmed that two oil tankers were disabled after hitting sea mines while attempting to transit the Strait of Hormuz, according to a statement shared by state media on Wednesday. The statement revealed that the tankers had been forced to disembark their crews and were placed in the hands of U.S. operatives to pass through what it called an "illegal route" in the strategic waterway. This latest development comes despite earlier warnings from the Guards' navy about the dangers of crossing the mined passage, highlighting the escalating tensions in the region. The incident represents a significant escalation in the conflict that has already severely disrupted oil shipments to India and other global markets.
Oil shipments to India have been severely disrupted by the Middle East conflict resurgence, with at least two major refiners forced to arrange more costly, alternative cargoes after planned deliveries didn't arrive on time. According to Business Standard, state-run Bharat Petroleum Corp. had four Persian Gulf cargoes that weren't delivered on schedule in August, comprising two from the United Arab Emirates, one from Saudi Arabia, and a fourth from Kuwait. Indian Oil Corp. has also seen its delivery schedules getting changed, highlighting how the war between Iran and the US continues to vex processors and boost costs. The sudden disruptions have forced local refiners to seek other crude supplies at short notice, contributing to a recent flurry of purchase tenders and cargo solicitations as reported by separate sources familiar with the trades.
Indian refiners are being forced to adjust crude purchase patterns daily as spot imports make up over 70% since the West Asian war began. Bharat Petroleum (BPCL) is covered until September, and will pursue purchases for October deliveries now, said Ramakrishna Gupta, chief financial officer. The refiner has tested ship-to-ship (STS) transfer waters in West Asia, daring to send a tanker to the Gulf of Oman to pick up an Iraqi cargo, with the cargo crossing the Strait of Hormuz on another tanker before transferring to BPCL's vessel. Other refiners said they haven't tried such risky STS operations due to difficulty finding ships for the voyage. After the recent cargo scramble, refiners are now comfortable with orders through to October, with many now largely arranging November deliveries, according to sources familiar with the trades. Refiners typically plan purchases several weeks or months in advance to optimize freight, crude grades and refinery runs, but when scheduled cargoes slip into later delivery windows, buyers typically have to pay up for replacement barrels that can reach their plants quickly.
As reported by Business Standard, Russian crude imports slumped by 700,000 bpd in August to 2.1 million bpd — down from a record 2.81 million bpd in July and 2.7 million bpd in June. This sent Russia's share of India's total crude oil imports to 44% so far this month, down from a record 56% in July — the highest-ever share of supplies by one country in over a decade. India imported a record 2.78 million bpd of Russian crude in July, or 56% of its total crude imports. The dependence surge followed the Iranian blockade of the Strait of Hormuz, which halved West Asian volumes. However, refiners in South Asia are facing an additional challenge as oil flows from Russia — a mainstay supplier — have also come under pressure because of Ukrainian attacks, with Urals now priced at a premium of about $2 a barrel, compared with a discount a few weeks ago due to Kyiv launching repeated strikes against Moscow's energy infrastructure.
The latest escalation has severely impacted shipping through the Strait of Hormuz, with visible commodity-vessel traffic dropping to around five ships per day over the weekend. According to The Economic Times, Centcom gave an update on its blockade of Iranian ports, with 83 commercial vessels redirected, three disabled, and two boarded as of August 30. UK Maritime Trade Operations issued a warning that another tanker transiting through the Strait had been struck by an unknown projectile. Even so, vessels transiting the waterway face a constant threat of attack, with a tanker reported being struck by three unidentified projectiles while moving outbound through Hormuz near Oman. The combination of low traffic, attacks on shipping, the US blockade, and renewed attempts from the IRGC to mine the Strait suggests the geopolitical premium isn't going anywhere anytime soon. Despite India's relatively short shipping distance from the Middle East, it typically relies on cargoes sent through the Strait of Hormuz, the chokepoint that links the Persian Gulf to global markets.
