HPCL Shifts Almost All Crude Imports to Delivered Basis as Freight Rates Double

Delivered cargoes previously made up about half of HPCL’s crude imports. Freight rates roughly doubled in the July-September quarter: shipping crude on a Suezmax tanker now costs about $9 a barrel, up from $3 to $4 in the prior quarter, according to director (finance) Srividya Venkataraman, with spot tanker rates hitting record highs in early October as shuttle services and ship-to-ship transfers out of the Strait of Hormuz tied up vessels.

Under the delivered arrangement, sellers bear freight, insurance, and transit risk until cargo reaches HPCL’s discharge port, which the company cites as a way to limit its own vessels’ exposure to the regional conflict, now in its eighth month. Traders reported that sellers including ADNOC and Saudi Aramco have absorbed some of the added shipping cost themselves on delivered cargoes sold to Asian buyers. For Indian refiners and the freight forwarders and insurers serving them, the shift signals how maritime risk from the Hormuz disruption is being priced and reallocated across the crude supply chain rather than absorbed at any single point.