Gulf Vessel Crunch Sends India Oil Freight Rates Soaring

For one large crude oil tanker of around 2 million barrels capacity on the Persian Gulf–India route, shipbrokers say the freight has been fixed at close to nine times the standard benchmark.
This record booking underlines that, although security risks have reduced, operational normalcy has yet to return for energy shipping through the area.

The current pricing stress is rooted in the confrontation involving the US, Israel, and Iran that began on 28 February 2026.
Hostilities triggered a collapse in ship movements through the Strait of Hormuz, the narrow passage through which about 20 percent of global oil supplies transit, with traffic dropping by roughly 92 percent at one stage.   At the peak of the crisis, daily shipping rates climbed as high as about US$423,736 per day, while insurance providers, spooked by the heightened risk, temporarily stopped offering cover for vessels operating in the zone.         This combination of skyrocketing freight and withdrawn insurance severely disrupted normal trading patterns and forced many ships to withdraw from Gulf routes.         Following the US–Iran understanding in June 2026, oil companies sought to resume imports from the Gulf region, only to confront a deficit of available ships.
During the months of tension, numerous tankers had shifted away from the area, and their return has been slower than anticipated, leaving a gap between cargo demand and tonnage supply.

Within a week of de‑escalation, only 65 empty vessels were able to position in the Gulf of Oman, and about 25 of these were reported to belong to a single operator, Sinocor.
With demand for liftings now exceeding the pool of available ships, buyers are being forced to accept sharply higher freight levels to secure tonnage.      One of the striking features of the current situation is that freight costs have surged while global crude benchmarks have actually softened.   Brent crude prices have declined to around US$73 per barrel, but this fall has not translated into immediate relief for India due to the tanker shortage and inflated shipping rates.

India’s state‑owned oil companies were estimated to be losing nearly ₹650 crore per day at the height of the crisis, and elevated logistics costs continue to weigh on them as long as vessel supply remains tight.