Politics · India Bureau
IOC to build fleet of crude and LPG carriers amid shipping disruption fears
Indian Oil Corporation is acquiring its own tanker vessels to reduce dependence on chartered ships as geopolitical tensions and freight cost volatility threaten energy supply security. The move reflects growing concern over shipping vulnerabilities in strategically vital sea lanes.
LSN India ·
State-owned Indian Oil Corporation (IOC), the country's largest oil refiner, is moving to strengthen its control over energy logistics by purchasing crude oil and liquefied petroleum gas carriers, marking a significant pivot in its shipping strategy.
The decision follows mounting disruptions to shipping routes around the Strait of Hormuz and sharp increases in freight costs that have exposed vulnerabilities in India's energy supply chain. IOC's board has already approved the vessel acquisitions, with tenders issued several months ago, according to Anuj Jain, the company's Director of Finance, speaking during second-quarter earnings discussions.
"The country needs oil sector companies to focus more on the shipping area now," Jain said, signaling the strategic importance of in-house maritime capacity. IOC is additionally exploring opportunities to develop ships domestically under the government's Make in India initiative, potentially bolstering domestic shipbuilding capabilities while securing energy transport infrastructure.
Historically reliant on a combination of time-chartered and voyage-chartered vessels, IOC is now evaluating a three-pronged approach: optimising existing charter arrangements, directly owning vessels, and supporting India's domestic shipbuilding sector. The strategy reflects broader concerns among India's energy majors about supply chain resilience in an increasingly volatile geopolitical environment.