Oil companies avoid Iran-blacklisted vessels as Hormuz shipping risks rise

Oil companies avoid Iran-blacklisted vessels as Hormuz shipping risks rise

At least three Indian oil refiners and a major global energy company are planning to avoid vessels placed on Iran’s 45-ship blacklist, as heightened security and regulatory risks threaten to further disrupt commercial shipping through the Strait of Hormuz.

The companies are reconsidering the use of the blacklisted vessels, including for ship-to-ship (STS) transfers, after Tehran warned that vessels accused of violating its transit rules could face fines, detention and cargo confiscation.

Iran announced the blacklist on Sunday through the Persian Gulf Strait Authority, saying the vessels had violated its rules for crossing the strategic waterway. Tehran also warned that ships conducting STS transfers or other cargo operations with the blacklisted vessels could themselves face action or be added to the list.

The move has created fresh uncertainty for oil producers, refiners, shipowners, charterers and commodity traders that depend on the Strait of Hormuz to move crude oil, liquefied natural gas and petroleum products from the Gulf to international markets.

The blacklist includes very large crude carriers, LNG carriers, LPG tankers and product tankers. Some of the vessels are linked to major Gulf energy and shipping companies, including ADNOC Logistics & Services and Saudi Arabia’s Bahri, as well as other international operators.

The restrictions appear to be particularly aimed at shuttle tanker operations used by Gulf oil producers such as Saudi Arabia and the United Arab Emirates. Under the arrangement, tankers transport crude and other petroleum products through the Strait before transferring cargoes to larger vessels through STS operations in the Gulf of Oman.

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Those transfers have helped maintain some Gulf oil exports despite the sharp decline in conventional shipping through the waterway.

However, the latest Iranian warning is forcing companies to reconsider whether the commercial benefits of such operations outweigh the risks.

Several charterers and shipping companies are reportedly holding internal discussions over whether to continue STS operations. A Gulf crude buyer told Reuters that purchasing oil on a delivered basis, rather than taking responsibility for cargoes at STS locations in the Gulf of Oman, could be a safer option.

Formosa Petrochemical is also reviewing its arrangements. Company president KY Lin said its internal departments were still discussing how to handle crude deliveries involving STS transfers through Hormuz in the longer term.

The impact could extend beyond the 45 vessels directly named by Iran because shipowners and charterers may become more cautious about dealing with any vessel that has previously interacted with a blacklisted tanker.

Kpler shipping analyst Ana Subasic said the main concern was a potential wider effect across the shipping industry. If Iran follows through on its threats, the number of shipowners, charterers and oil buyers willing to operate in the region could shrink, particularly among companies with significant exposure to Gulf energy shipments.

That could result in higher freight rates, insurance premiums and security costs, while also increasing the due-diligence requirements companies must meet before chartering vessels or arranging cargo transfers.

The blacklist is particularly sensitive because some of the affected vessels are connected to major Gulf energy companies, including Saudi Aramco and ADNOC. Shipping data indicate that the vessels have been used to transport crude oil, refined products and LNG. Neither Saudi Aramco nor ADNOC has publicly commented on the blacklist.

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The security situation has also affected the visibility of some vessels. Two of the 12 very large crude carriers on Iran’s list stopped transmitting their locations through their automatic identification systems (AIS) after the blacklist was announced, while other vessels had already switched off their transponders.

Shipping traffic through the Strait of Hormuz remains well below recent averages. Preliminary Kpler data showed that only five commodity vessels crossed the waterway on Tuesday, compared with a 10-day average of 15 crossings. Four vessels crossed on Monday.

The low traffic levels underscore the seriousness of the disruption. The Strait is a critical route connecting the Persian Gulf with the Gulf of Oman and Arabian Sea, and its disruption has implications for global crude oil and gas supplies.

The latest Iranian restrictions come against the backdrop of an escalating confrontation involving Iran and the United States, with Washington increasing economic pressure on Tehran and the wider regional conflict continuing to affect maritime operations.

At the same time, Iran and Oman have resumed discussions over how commercial navigation through the Strait can be managed. The countries are considering a temporary shipping corridor and measures to clear mines from the waterway.

The talks could eventually help restore more predictable shipping, although analysts caution that any arrangement remains fragile and may not immediately return traffic to normal levels.

The continuing uncertainty is forcing energy companies to reassess their supply chains and shipping strategies.

For Indian refiners and other Asian oil buyers, avoiding blacklisted vessels could mean finding alternative tankers or changing the way crude is delivered. For Gulf producers, it could complicate the movement of cargoes through the waterway and increase the cost of getting oil to international customers.

The situation also creates additional pressure on the global oil market, where prolonged disruption to one of the world’s most important energy corridors could increase transportation costs and contribute to volatility in crude prices.

For now, the decision by several oil companies to avoid Iran-blacklisted vessels represents another indication that the Strait of Hormuz crisis is increasingly influencing commercial decisions across the international energy industry.

If Tehran begins enforcing its threatened penalties against vessels dealing with blacklisted tankers, the consequences could extend well beyond the 45 vessels currently identified, potentially reducing the pool of ships available for Gulf energy trade and adding another layer of risk to global oil and gas supplies.

Oil companies avoid Iran-blacklisted vessels as Hormuz shipping risks rise