India’s Crude Import Bill Surges as Hormuz Shipping Rates Soar

India’s crude import costs have risen sharply since the Iran war disrupted Middle Eastern oil supplies, pushing up crude prices, tanker freight rates and war-risk insurance costs. The disruption has made Middle Eastern crude significantly more expensive to deliver to India.

Freight rates on the key Ras Tanura–India route have surged more than 400% since February 28. VLCC shipping costs increased 411% to $4.34/barrel in August, from $0.85/barrel before the war.

Alternative supply routes have also become more expensive. Freight from Corpus Christi to India climbed 150% to $15.86/barrel, while shipping from Russia’s Ust-Luga to India more than doubled to $19.90/barrel.

War-risk insurance has seen an even sharper increase, rising from around $250,000 to as much as $10 million for a single Hormuz transit.

Higher freight and insurance costs have compounded the rise in crude prices, with Brent gaining around 25% since the war began and briefly moving above $100/bbl. India’s crude import bill was 60% higher year on year in April–June, while the July bill increased 41% from a year earlier.

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