Indian Oil plans to buy its own oil, LPG ships as freight costs surge 4 times
Indian Oil Corporation (IOC) is planning to acquire its own fleet of oil and LPG tankers to mitigate surging freight costs and supply chain disruptions near the Strait of Hormuz. The company is also exploring domestic shipbuilding options under the 'Make in India' initiative.
Why it matters
Rising shipping costs and geopolitical instability are forcing state-owned energy firms to vertically integrate their logistics to ensure energy security.
With shipping costs rising sharply and movement around the Strait of Hormuz facing disruptions, Indian Oil Corporation (IOC) is looking to take greater control of how its crude oil and liquefied petroleum gas (LPG) reach its refineries.The state-owned oil major plans to purchase its own carriers and is also exploring the possibility of getting ships built in India.IOC's board has approved the purchase of a few vessels, and tenders for the proposed acquisitions were issued several months ago, director of finance Anuj Jain said during the company's second-quarter earnings call."The country needs oil sector companies to focus more on the shipping area now," Jain said, adding that the company was examining shipbuilding opportunities in India under the government's Make in India initiative.The proposed purchases could change the way IOC manages its shipping requirements.
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