Key facts
- MRPL has barred crude suppliers from using the Strait of Hormuz and Red Sea routes in a spot tender.
- This restriction applies to a tender for up to 1 million barrels of crude for delivery between August 25 and September 6.
- Three product tankers loaded at Saudi Arabian Red Sea ports have rerouted north towards the Suez Canal.
- The rerouting is a response to Houthi threats and a 'maritime ban' on Saudi Arabia.
- Saudi naphtha and gasoline exports through the Bab el-Mandeb strait have significantly declined in July.
Mangalore Refinery and Petrochemicals Ltd. (MRPL), an Indian refinery, has implemented a new restriction for its crude suppliers, barring them from using the Strait of Hormuz and the Red Sea routes. This measure was included in a spot tender seeking up to 1 million barrels of crude for delivery between August 25 and September 6.
This development comes amid heightened threats to shipping in the Red Sea from Houthi forces. Three product tankers loaded at Saudi Arabian Red Sea ports and originally destined for Asia-Pacific and east Africa have turned north towards the Suez Canal. This rerouting is a direct response to Houthi-related threats and a 'maritime ban' on Saudi Arabia announced by the Iran-backed militant group on July 20.
The Seferis tanker, loaded with gasoline from the Samref refinery at Yanbu, is now heading towards Suez instead of its signaled destination in Kenya. Similarly, two Saudi naphtha cargoes, one chartered by Aramco Trading Singapore and another by the same entity, have also shifted west. The Hafnia Experience, initially bound for Japan, now lists New York as its discharge destination, while the Torm Innovation, also carrying naphtha from Yanbu, has transited the Suez Canal and is en route to Spain.
Market participants note that these tankers were fixed before the latest Houthi escalation. Routing through Suez and around the Cape of Good Hope would add approximately a month to voyages and increase freight costs. Saudi naphtha and gasoline exports through the Bab el-Mandeb strait have seen a significant decrease in July compared to previous months. The situation is further complicated by Houthi claims of strikes on Saudi Aramco facilities at Jizan and Yanbu, with satellite imagery indicating damage to storage tanks, potentially causing delays in product loadings.