Key facts
- Ship-to-ship transfers are expanding to India's West Coast due to congestion near the Strait of Hormuz.
- About 680,000 barrels per day were transferred in India's Gulf of Kutch in September.
- Operational limits are being reached at transfer zones in Oman and the UAE.
- Iraq is offering crude at discounts due to risks associated with moving barrels out of Hormuz.
- The UAE's Murban crude receives a premium as it bypasses Hormuz via pipeline.
Ship-to-ship (STS) oil transfers are increasingly occurring off India's West Coast as operational limits are being reached at established transfer zones closer to the Strait of Hormuz. In September, approximately 680,000 barrels per day (bpd) were transferred onto larger vessels in India's Gulf of Kutch, according to data from Vortexa cited by The National. This eastward shift in STS activity aims to keep oil supplies flowing to Asian markets despite heightened risks associated with navigating the Strait of Hormuz. The congestion at existing STS zones in the UAE and Oman is prompting some producers and buyers to seek transfer points further along the route to Asia. While the STS transfer itself is considered low risk, the primary risk lies in moving the oil from west of Hormuz to these transfer zones. Recent pricing for Middle Eastern crude grades reflects these risks, with Iraq offering Basrah Medium and Basrah Heavy at significant discounts, while the UAE's Murban crude commands a premium due to its pipeline access outside the Strait of Hormuz.