India Eyes Iranian Crude Amid Supply Dips and Middle East Tensions

Key Highlights

• Bitumen ranges ₹33,700–₹48,052/MT; base oil at ₹67/kg, fuel oil ₹47.5/kg
• Over 100 domestic crude tankers planned to boost strategic energy logistics
• Oil India posts mixed Q4 FY25 results; dividend declared despite margin pressure
• Israel-Iran tensions lift crude prices; India may resume Iranian crude imports

Bitumen, Base Oil, and Lubricant Price Update

• Refinery Bitumen (VG30) is currently priced at ₹48,052 per metric ton in Panipat, while Roadgrip Bitumen (VG40) is available at ₹36,500 per metric ton in Karwar. 
• In Mathura, Roadgrip Bitumen Emulsion (RS1) is being offered at ₹33,700 per metric ton. Base Oil (SN150) is trading at ₹67 per kilogram in Delhi. 
• Meanwhile, Fuel Oil (Virgin 180cST Furnace Oil) is priced at ₹47.5 per kilogram in Mundra.
• Among lubricants, LubriEdge Hydraulic Oil (Grade 68) is selling for ₹87 per litre, and LubriEdge Gear Oil (Grade 150) is priced at ₹115 per litre, both in Bhiwadi.
• Global shipbuilding and crude tanker prices are experiencing moderate firmness. Prices for VLCCs (Very Large Crude Carriers) and Suezmax tankers have remained elevated amid constrained shipyard capacities and rising steel and equipment costs. 
• Spot newbuild prices for VLCCs are currently around $120–125 million, while smaller Aframax vessels are quoted between $60–70 million, depending on specifications and delivery windows. 
• India’s massive order plan is likely to support firm price sentiment in the near term.

Crude Tanker Orders to Boost Energy Independence

India’s announcement of acquiring over 100 domestically built crude oil tankers marks a significant shift toward strategic energy security and Make in India industrial policies. The move will stimulate:

• Domestic shipbuilding demand: Indian shipyards are expected to receive large-scale orders across small, medium, and large tanker categories, encouraging investment in infrastructure and employment.
   
• Tanker market tightness: While the international market remains moderately supplied, India's bulk order could exert upward pressure on global delivery lead times, impacting availability.
   
• Crude logistics diversification: India aims to reduce dependence on foreign vessels, especially amid geopolitical risks in West Asia, Red Sea, and the Indo-Pacific.
   
• Fleet modernization: Most Indian shipping firms operate older tankers. This step may replace aging fleets with energy-efficient, IMO-compliant vessels.
   
• Operational shifts: New capacity entering over the next 4–5 years may change the regional shipping dynamics, especially for Indian refiners and oil PSUs like IOC, BPCL, and ONGC.

On the global side, tanker orders have surged in anticipation of IMO regulations, but available shipyard slots are limited through 2027, especially in Korea and China. India’s decision may help relieve some international pressure if domestic yards deliver timely.

Petroleum Market News: Mixed Performance in Oil India’s Q4 Results

• Oil India has reported its Q4 results for 2025, showcasing a 20% rise in profits, driven largely by operational efficiency and strategic sourcing, particularly from Russian crude imports. Dr. Ranjit Rath, CMD of Oil India Limited and Chairman, provided insights into the company’s performance and future direction. 
• However, another report indicated a drop of 22% in OIL’s net profit to ₹1,591.48 crore in Q4 FY25 due to weaker crude oil prices and shrinking operational margins. Despite the dip, the company declared a dividend, signaling confidence in its long-term outlook.
• In geopolitical developments, tensions in the Middle East have heightened, with Israel reportedly planning strikes on Iran’s nuclear facilities. This news caused a sharp spike in global crude oil prices, raising concerns for oil-importing nations like India. Analysts warn that any escalation could prove economically costly for India, given its dependence on crude imports.
• India's crude oil demand continues to grow steadily. While China is expected to reach peak oil demand in the next 3–5 years, India is projected to witness an annual crude consumption growth of 3% to 5%, fueled by rapid economic expansion and industrialization. Consequently, India is likely to become the world's leading driver of oil demand by 2030.
• India’s overall refinery throughput and output of petroleum products also declined during April 2025. This downward trend has been attributed to lower demand and operational constraints. Furthermore, exports of petroleum, oil, and lubricants (POL) dropped by 12.4%, contributing to concerns about trade balance impacts.
• Amid these fluctuations, Indian refiners are turning their attention to Iranian crude oil once again, as diplomatic progress is reported in the US-Iran nuclear talks. Should tensions ease, the possibility of resuming Iranian crude imports could offer India a strategic advantage and alternative sourcing route, diversifying its energy basket.

Expert Opinion: Geopolitics and Global Trends Drive Volatility

In the short to medium term, new tanker orders from India will likely support shipbuilding prices and tighten global capacity, though actual delivery and deployment will span multiple years. The move signals India’s strategic push to control logistics amid energy uncertainties, and the long-term impact could recalibrate shipping routes and cost structures for Indian crude imports.