India’s recovering crude oil imports from Iraq and Indian refiners’ growing responsibility for arranging tanker transport are adding pressure to an already tightening tanker freight market, amid persistent security threats across the Strait of Hormuz and the Red Sea.
According to market data from Signal Group, Iraqi crude oil shipments to India more than doubled in September 2026 to 4.41 million tonnes, marking a 106.3% increase from August and a 13.7% rise year-on-year. In contrast, Russian crude shipments to India declined 32.3% month-on-month to 5.48 million tonnes.
The revival in Iraqi supplies follows a near-cessation of shipments between March and July, with imports recovering to levels slightly above the average recorded during January and February.
Indian refiners take greater responsibility for tanker arrangements
Indian Oil Corporation, Reliance Industries, Bharat Petroleum Corporation and HPCL-Mittal Energy have been purchasing Iraqi crude on a free-on-board (FOB) basis and chartering tankers to transport cargoes from the Persian Gulf.
Under this arrangement, refiners are responsible for securing vessels and managing transportation, exposing them more directly to fluctuations in freight rates, vessel availability and voyage-related risks. Previously, Indian refiners often relied on Gulf producers and international energy companies to arrange deliveries, paying a premium for the service.
The shift towards FOB purchases is increasing the importance of tanker availability and freight costs in crude procurement decisions. Market data indicate that Iraq–India shipments have primarily moved on very large crude carriers (VLCCs), while Russian crude shipments have largely been transported on Aframax and Suezmax vessels.
Tanker freight rates surge across major routes
The recovery in crude oil movements is coinciding with a sharp rise in tanker earnings across several global routes. The latest weekly assessment showed earnings increasing across all seven Aframax routes tracked, with gains ranging from 28.3% to 73.2%. Atlantic Suezmax earnings also climbed by 32% to 38%.
Very large crude carrier earnings on Middle East Gulf routes remained among the highest in the crude tanker market. Earnings on the Middle East Gulf–Singapore route rose 17.7% week-on-week to approximately US$1.45 million per day, while the Middle East Gulf–China route increased 15.6% to around US$1.41 million per day.
Freight strength extended beyond the Gulf. Earnings on the US Gulf–China VLCC route rose 59.3% to approximately US$638,000 per day, while the Black Sea–Mediterranean Suezmax route recorded a 67.5% increase to around US$817,000 per day.
The surge reflects a combination of recovering cargo demand, constrained vessel availability and continuing disruption risks. Charterers are increasingly splitting suitable cargoes into smaller parcels as securing larger vessels becomes more difficult.
However, the strength is not uniform across tanker segments. Earnings declined across all 11 medium-range clean tanker routes tracked in the latest assessment, highlighting the divergence between crude and refined-product shipping markets.
Security risks continue to disrupt oil export routes
Maritime security concerns remain a significant factor in tanker operations and freight costs. At least 12 attacks on oil, liquefied natural gas and liquefied petroleum gas tankers were reported around the Strait of Hormuz between September 28 and October 5, 2026, according to the report. The International Maritime Organization recorded nine incidents during the same week.
Separately, Saudi Arabia’s crude export operations through Yanbu have been recovering following a temporary disruption to the East–West pipeline and a subsequent suspension of loading after a projectile struck the port on October 1.
Although pipeline flows recovered, seaborne exports remained below their early-September levels at the end of the month. Tankers carrying cargoes from Yanbu to India and other Asian destinations must also navigate the Bab el-Mandeb Strait, where security incidents continue to pose risks.
War-risk insurance premiums have risen sharply. Reported quotations for tankers transiting Hormuz reached 6%–9% of vessel value, while premiums for Saudi-linked vessels calling at Yanbu were around 3%, according to figures cited in the report. Actual premiums vary according to the vessel, voyage and agreed insurance terms.
Outlook: Freight pressure likely to persist
The recovery in Iraqi crude shipments and the resumption of Saudi export activity could support tanker demand in the coming weeks. However, continuing maritime security threats, elevated insurance costs and restrictions on vessel participation are likely to keep freight markets volatile.
The pace at which loading programmes normalise, vessels become more readily available and transit conditions improve will be critical in determining whether the current pressure eases.
For Indian refiners, the combination of changing crude sourcing patterns and greater responsibility for arranging transportation means that tanker chartering and voyage-risk management are becoming increasingly important components of import procurement.