New Delhi, November 8, 2026 (Yes Punjab News)
Indian Oil Corporation (IOC) is planning to acquire its own vessels and explore shipbuilding options in India to strengthen its crude oil and liquefied petroleum gas (LPG) import network and reduce exposure to disruptions caused by geopolitical tensions.
Anuj Jain, Indian Oil’s Director (Finance), said during the company’s October 31 earnings call that tenders for purchasing a few vessels had been issued several months ago. The company is pursuing a three-pronged shipping strategy involving its existing chartered fleet, acquisition of ships and possible orders with Indian shipyards.
IOC currently operates three crude oil tankers and nine LPG carriers on time charter. These arrangements have helped it contain transportation costs amid a sharp rise in global freight rates during the West Asia conflict.
According to Jain, crude transportation under long-term charter arrangements costs the company around $2-$2.50 per barrel, compared with spot market rates of $8-$10 per barrel. LPG freight rates have climbed to approximately $160-$180 per tonne from normal levels of around $40.
The company is also examining opportunities to place shipbuilding orders with domestic shipyards under the government’s Make in India initiative. It had earlier explored acquiring four medium-range vessels through an arrangement involving the Shipping Corporation of India and other public-sector oil companies.
IOC has also diversified its crude sourcing as disruptions around the Strait of Hormuz have affected supplies from West Asia. It has increased purchases from Russia, Venezuela, Brazil and African countries.
During the first half of FY27, around 87 per cent of IOC’s crude purchases were made in the spot market, compared with approximately 50 per cent in the previous financial year. Russian crude accounted for about 55 per cent of its purchases during the period, while West Asian supplies fell to around 24 per cent.
Jain said the Indian crude basket, which averaged $65-$70 per barrel before the Iran war began in February, crossed $100 in March and averaged around $120 in October.
The company has also been sourcing lower-cost heavy crude from Venezuela for processing at its Paradip refinery in Odisha.
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