Whalesbook
The safe passage of the Indian tanker 'Desh Garima' through the Strait of Hormuz is a notable achievement. Traffic through the vital waterway has dropped sharply, from an average of 120-140 ships daily to just a few on some days. This highlights the serious security worries and unpredictability now surrounding this key global energy route. Despite these disruptions, at least ten Indian-linked tankers have safely completed journeys since April 13, showing a strong effort to keep energy supplies flowing. But this comes at a high price: freight rates have surged. Very Large Crude Carrier (VLCC) day rates hit a record $423,000 on the Middle East-to-China route in late March 2026. War-risk insurance premiums have also jumped, adding millions to voyage costs and overall expenses for ships in the region.
New Delhi has strongly denied any financial dealings with Iran's Islamic Revolutionary Guard Corps (IRGC). Officials dismissed reports of USD payments as 'fake news,' stating India does not engage in illicit transactions. This aims to shield India from the economic impact of the conflict. However, this denial comes amid direct military actions. Previous reports mention IRGC gunboats firing on vessels like the 'Sanmar Herald' and 'Jag Arnav', forcing them to turn back. These incidents show the risky environment, where conflicting messages and security threats can make commercial operators hesitate. The Indian Navy's deployments and 'Operation Urja Suraksha' highlight its commitment to protecting national interests and sailors, even as diplomacy seeks de-escalation.
India relies heavily on imported crude oil, getting about 88% from abroad and nearly half from West Asia. This makes the country highly vulnerable to any disruptions at the Strait of Hormuz. Market analysis shows that for every $10 per barrel increase in oil prices, India's annual import bill rises by $13-14 billion. This directly affects inflation and widens the current account deficit. For instance, in March 2026, Brent crude prices jumped to $126 per barrel after earlier escalations. The closure of the Strait of Hormuz in March 2026 was called the biggest disruption to global energy supply since the 1970s energy crisis. Imports like LNG and fertilizers also face significant risks from regional disruptions, potentially affecting domestic supply and industry.
The global tanker market is highly volatile due to geopolitical instability and changing supply chains. VLCC freight rates have broken previous records, with daily rates exceeding $423,000 for some vessels. The tanker market is expected to stay strong through 2026, driven by steady demand and limited vessel supply. However, a slowdown is possible in 2027 as more new ships are delivered. In India, the marine and shipping industry has performed well, growing 70% in the last year. Future earnings are projected to increase by 61% annually. The Shipping Corporation of India (SCI) has a P/E ratio of about 12.90x and a market cap of roughly ₹14,000 Cr. Challenges remain, including higher borrowing costs and the need for greater global competitiveness in acquiring assets and improving operations.
The safe transit of Indian ships through the Strait of Hormuz, combined with official denials of IRGC payments, shows India is pursuing both operational strength and diplomatic talks. However, the market's future remains tied to the unstable geopolitical situation in West Asia. High freight rates, rising insurance costs, and the constant risk of supply disruptions will keep affecting global energy prices and India's import costs. While India's shipping sector shows strong growth potential, its performance will depend on regional conflicts calming down and critical shipping routes like the Strait of Hormuz remaining open. How India balances energy security with geopolitical risks will shape the sector's direction ahead.