Indian Oil plans to buy own crude and LPG carriers

State-owned Indian Oil Corporation plans to acquire its own crude oil and LPG carriers, as disruptions to shipping around the Strait of Hormuz and sharply higher freight costs push India’s largest refiner to take tighter control of its supply chain. The plan was reported on November 8.

The move marks a potential shift for a company that has traditionally relied on a mix of time-chartered and voyage-chartered vessels. IOC is examining three approaches, which are optimising its existing charter arrangements, owning ships and supporting domestic shipbuilding. Tensions in West Asia have disrupted commercial movement near the Strait of Hormuz, pushing up both freight rates and war-risk insurance costs.

IOC currently has three crude oil vessels and nine LPG vessels on time charter, according to Finance Director Anuj Jain, and these arrangements have delivered significant savings during the crisis. The gap between chartered and spot rates is wide. LPG freight, which would normally be around $40 a tonne, has risen to $160 to $180 a tonne on the spot market. Jain also said the company was holding 20 days of LPG inventory and 23 to 25 days of petrol and diesel stocks.

The plan follows comments by IOC Chairman A S Sahney at an energy technology meet in Goa, where he said India had been neglecting shipping and needed to build its own capabilities. He said the country buys crude at a discount but freight eats up the benefit.

It also fits with a wider government push. Bloomberg reported in May 2025 that India plans to spend about Rs 85,000 crore, or $10 billion, on 112 crude carriers through 2040. The aim is to raise the share of locally built tankers in the fleet from 5% to 7% by 2030 and to 69% by 2047. Petroleum Minister Hardeep Singh Puri said in October 2025 that India’s three state-run oil marketing companies spend roughly $8 billion over five years on chartering foreign vessels.