Crude Tanker Exits Conflict-Hit Strait of Hormuz Bound for India

Strait of Hormuz Oil Traffic Resumes with First Non-Iranian Tanker

Shenlong, a tanker owned by Shenlong Shipping Ltd. and managed by Dynacom Tankers Management Ltd., has exited the Strait of Hormuz, marking the first non-Iranian crude oil tanker to pass through the waterway since the conflict in West Asia escalated. According to S&P Global Commodities at Sea, the tanker loaded oil from Saudi Arabia's Ras Tanura on March 1 and arrived at Mumbai, India on March 10.

The tanker's draught at Mumbai was 15.8 meters, up from 9.3 meters at Ras Tanura, indicating it had loaded oil. The ship's destination remains unknown, as its Automatic Identification System was turned off before transiting the Strait and then turned on again afterward.

The development assumes significance as the Strait of Hormuz serves as a key chokepoint for 20% of global oil supplies and 50% of India's energy imports. Tanker traffic at the Strait of Hormuz has fallen to minimal levels, with only 2-3 transits per day, compared to the usual 60.

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Platts, part of S&P Global Energy, assessed the rate to carry 130,000 metric tons of crude from the Persian Gulf to Asian buyers in the far east at $158.63/mt on March 10, up from $51.42/mt on February 27 prior to the conflict. Indian refiners have started increasing their energy imports from alternative routes, including Saudi Aramco's and ADNOC's oil pipelines specifically built to bypass the Strait.

However, these routes remain insufficient to fully compensate for the loss of shipments through Hormuz. The longer the Strait of Hormuz remains effectively shut, the worse the impact on physical supplies, inventories, and prices, and not just in Asia.