 "Ship Carrying oil cargo")
Growing attacks on ships, especially oil tankers, in and around the Red Sea will temporarily affect India’s crude shipments from West Asia, a petroleum ministry official said on Sunday after two India-bound vessels were attacked by drones, triggering concerns over maritime trade amid the Israel-Hamas conflict.
Late on Saturday, Gabon-flagged commercial crude oil tanker MV Sai Baba with 25 Indian crew members reportedly came under a one-way drone attack in the Southern Red Sea from the Iran-aligned Houthi rebels, who control much of Yemen, but no one was injured, the United States Central Command (CENTCOM) said on Sunday. CENTCOM is one among 11 unified combatant commands of the US Department of Defense and operates in the Central Asian region.
MV Sai Baba had received a certification from the Indian Register of Shipping. International law requires that merchant ships register in a host country. Registration gives the ship the right to fly the flag of the host country, under whose laws it operates. The vessel was reportedly on its way to India.
The US Central Command's report came a day after merchant vessel MV Chem Pluto, with around 20 Indian crew members, was hit by a suspected drone about 217 nautical miles off the Porbandar coast in the Arabian Sea and caught fire. The area is far away from the Houthis main base in Western Yemen and was sailing about 860 nautical miles off the Yemen coast when it was hit. The Japanese-owned and Liberia-flagged vessel was shipping petrochemicals to Mumbai.
"The bulk of crude volumes pass through those waters. The government is keeping an eye on the situation. But given that the situation is quickly escalating, such attacks will affect the flow of crude in the short term from West Asia," an official said. He also said the shipping charges are also expected to rise further as consignments from Europe are already ditching the Suez Canal-Red Sea route in favour of the much longer route around Africa and the Cape of Good Hope.
While the Ministry of External Affairs is yet to officially comment on the issue, shipping industry executives have expressed particular concerns about the attacks.
"If this happens, then ships coming from even the Persian Gulf are not safe," the official said. Imports from Saudi Arabia, the United Arab Emirates, Kuwait and Oman traverse the Gulf to reach the Arabian Sea, and on to the west coast ports.
The fresh assaults have come in the wake of Iran-backed Houthis stepping up attacks on ships in the Red Sea amid the Israel-Hamas conflict.
West Asian crude
After more than a year of securing major shipments of Russian crude, India is increasingly looking to re-establish supplies from its traditional partners in West Asia. As of November, Iraq and Saudi Arabia were the second and third-largest sources of crude for India, said London-based commodity data analytics provider Vortexa, which tracks ship movements to estimate imports. The share of crude coming from these nations has risen over the past few months.
However, officials said the potential supply disruptions from West Asia are not expected to make a major dent in overall shipped volumes. This is primarily owing to the gamut of discounts on Russian crude oil shipped to India. People in the know said discounts hovered between $9-$11 per barrel in November, up from $8-$10 per barrel in October, and the low levels of $4-$5 per barrel in mid-2023.
In November, the share of Russian crude in India's imports stood at 33 per cent, same as October, and down from September's 35 percent, Vortexa data showed. This remains much lower than its historic high of 42 per cent, seen in May. Shipments from Russia reduced 4 per cent to 1.49 million barrels per day (bpd) in November, down from 1.55 million bpd and 1.62 million bpd in the previous two months. Overall import volumes have reduced in recent months.
