Buyers turn to India for refined products amid Persian Gulf disruption

The ongoing war in the Middle East has nearly halted oil shipments from the Persian Gulf, prompting refined product buyers to look elsewhere, and has brought West Coast India into focus, multiple market participants said March 4.

Several distillate cargoes were covered overnight for loading from Sikka port on India's west coast, and more such deals were in the offing, according to charterers, brokers and tanker owner sources who spoke to Platts, part of S&P Global Energy.

India may emerge as a more important supplier of refined products in Asia and Europe than usual for at least a few weeks, the sources said on March 4.

The country ships more than 6 million metric tons each of naphtha and gasoil annually to East Asia and Europe, respectively, according to S&P Global Commodities at Sea data.

Apart from Sikka, refined products are also exported from West Coast India's Mumbai, Cochin and New Mangalore, among others.

Japanese buyers are also looking to secure some of their naphtha requirements from India, a chartering source in North Asia said.

Demand to lift cargoes from West Coast India will increase due to the ongoing war, but it cannot be met totally because of volume constraints, said a chartering executive with a global commodities trading company.

India can supplement the supplies from the Persian Gulf, but is in no position to be a "total substitute", the executive said. Saudi Arabia exported around 14 million mt of gasoil to Europe in 2025, which was more than double the volume shipped by Indian refineries, CAS data showed.

Similarly, East Asian buyers imported around 6 million mt naphtha from India, while the UAE alone shipped out close to 20 million mt, according to CAS data.

India can export refined products only if the crude supply chain is consistent, but shipping sources said shipments from the Middle East are delayed. As current inventories are depleted, the export of naphtha, gasoil, and jet fuel will slow, a shipbroker involved in such deals said.

Another option under consideration by importers is Oman's Duqm port, at the mouth of the Arabian Sea. In a latest deal confirmed by several market participants, an oil major chartered an MR for March 13 diesel loading on the Duqm-South Africa route. An MR can typically load up to 40,000 mt.

The US International Development Finance Corp., or DFC, in a statement overnight, offered its Political Risk Insurance and Guarantee products to American and allied businesses operating in the Middle East, but shipping market participants in Asia said that they may not qualify for this support, as a large part of the trade is done by non-US-linked companies.

Some shipowners are renegotiating war risk premiums with international insurance companies, a source with an owner who charters out tankers said.

At least three MR clean tanker fixtures were finalized overnight for March 10-15 Sikka loading for delivery into East Africa, brokers said March 4.