Oil companies, exporters, importers cheer Hormuz Strait opening – The Times of India

NEW DELHI: Indian oil companies, fertiliser importers and exporters are cheering the opening of the Strait of Hormuz for global commercial vessels.There are 41 India-bound ships, both Indian and foreign-flagged, loaded with cargo, including crude, LPG, LNG and fertiliser, that are waiting to cross the narrow channel, where Iran has blocked normal movement since Feb 28, the day US and Israel launched a joint military strike.Over a dozen of these ships are carrying fertilisers, which are crucial for India to receive before the kharif sowing starts. Of the vessels waiting west of Hormuz, 15 are Indian, while the remaining 26 are foreign-flagged. TOI has learnt that among these, 10 are loaded with crude oil, four are LPG tankers and three are carrying LNG.

Soon after the announcement, oil prices retreated below $90 levels, with Brent futures trading 11.5% lower at $87.9 a barrel. Lower oil prices will translate into lower transport costs.“The fall in oil prices will result in a decline in international freight rates, which will be a big gain across sectors,” said Dev Garg, director at Singapore-based shipping firm Eximwala Solutions.Danish Shah of Pune-based Sanghar Exports said that with freight costs topping the price of a consignment of onions, exports to West Asia, a key market for his company, had almost stopped. In any case, with the uncertainty, banana exports to most of West Asia have been suspended given its perishable nature. “We need to see how shipping lines respond to it. Currently, it is unviable to export.”While exporters are hoping that normalcy returns in the Strait, they are also expected to push shipments over the next few days, subject to availability of ships and containers.Amit Marwah, MD of Amritsar-based DRRK Foods, expects demand to increase from West Asia and his company’s 18,000 tonnes of basmati rice stranded at Indian ports to start moving. “We are expecting bulk demand from the region, especially with freight rates expected to come down,” he said. Freight rates have shot up four-to-five times compared to the $700 a container DRRK was paying to ship goods to Jeddah port.“We will not just be able to push our goods to West Asia but this will result in a shorter route for cargo meant for Europe. It is positive for our exports in April,” said Ajai Sahay, director general at exporters’ body Fieo.Officials tracking the developments said that around two dozen Middle East-bound ships are waiting at Indian ports. “Things will be clearer in the next couple of days as more ships start crossing the Strait. How shipping lines complete procedures and negotiate war risk charges with insurers remains to be seen. It takes four-to-six days for ships to travel from west of Hormuz to Indian ports. The resumption of free sailing will bring huge relief,” said a senior official at a govt-owned port.The arrival of cargo on ships waiting to clear the 36-km passage is expected to ease pressure on energy supplies, which have been disrupted for more than 45 days due to military conflict in West Asia and closure of Hormuz. India used diplomatic channels to ensure that nine Indian merchant ships — all carrying LPG, the primary cooking fuel in the country — crossed the Strait safely. Govt has not shared details of foreign-flagged vessels, saying these relate to trade and are chartered by different firms.To ensure there was no shortage of energy supplies, officials said India secured supplies from diversified sources during this period.