Mangalore Refinery and Petrochemicals Limited (MRPL) has declared force majeure on gasoline exports as the global oil crisis intensifies around the Strait of Hormuz. The company's latest declaration comes as oil prices surge to multi-year highs amid escalating tensions in West Asia, with Brent crude reaching ₹92.69 per barrel and WTI crude at ₹90.90 per barrel. MRPL's force majeure declaration represents a significant escalation from the company's earlier denial of shutdown rumors on March 07, 2026, when it categorically denied feedstock shortage claims and confirmed operations were normal at 300,000-barrel-per-day capacity.
The Strait of Hormuz remains under operational freeze as Iran claims 'complete control' over the critical waterway, which handles nearly one-third of the world's total seaborne oil shipments. This has created a cascading effect across global energy markets, with dozens of Asia-flagged oil tankers stranded near the strait and LNG shipping rates soaring 650% to $300,000 per day. The crisis has particularly impacted Asian refiners, who are facing difficulties securing prompt replacement crude cargoes as Iranian threats to shipping have disrupted oil flows through the strategic waterway. The ongoing tension has raised significant concerns regarding the security of international maritime trade routes, with authorities closely monitoring the situation and exploring alternative supply routes to mitigate risks.
In response to the escalating crisis, the Indian government has restricted the diversion of propane and butane—essential components for LPG—to the petrochemical industry. Refineries have been instructed to work with these gases solely for the production of domestic cooking gas to ensure that raw materials required for LPG aren't diverted to non-essential industrial processes during the crisis. Under the latest government mandate, refineries are required to prioritize the domestic market and ensure that their LPG output is sold exclusively to the three state-owned Oil Marketing Companies (OMCs) - Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL).
India has transformed its energy procurement strategy over the past two years, reducing its vulnerability to conflicts in the Middle East. According to recent reports, Russian oil imports surged from 2% of India's total imports in 2022 to 20% by February 2024, with India importing 4 lakh barrels of crude oil per day from Russia. This diversification has provided a crucial buffer, as India is now less dependent on the Strait of Hormuz for its energy requirements. The current crisis has highlighted the importance of this strategic pivot, with authorities reassuring that the current reserves of crude oil and petroleum products are at comfortable levels to meet national demand, with the government closely monitoring the situation and exploring alternative supply routes to mitigate risks.
The escalating oil crisis has sent Asian markets into free fall as oil price surges stoke inflation fears across the region. Goldman Sachs has hiked its Q2 Brent oil price forecast by $10, while JP Morgan warns of catastrophic oil supply losses from a potential Middle East war. MRPL's force majeure declaration reflects the broader challenges facing Asian refiners as they navigate the complex supply chain disruptions caused by the Strait of Hormuz crisis. The company's earlier denial of shutdown rumors now appears prescient as the situation has evolved into a full-blown crisis affecting global energy markets and refinery operations across the region.
