India’s Mangalore Refinery and Petrochemicals (MRPL) has declared force majeure on all gasoline export cargoes scheduled for March and April, Reuters reported, citing trade sources.
Force majeure allows a company to suspend contractual obligations due to circumstances beyond its control.
The move comes amid the escalating conflict between the US and Iran, which has disrupted crude oil flows from the Gulf region.
MRPL exports 40% of refined fuel output
MRPL operates a 500,000-barrel-per-day refinery in Karnataka and exports about 40% of its refined fuel output.
According to Reuters, the company had already awarded two to three gasoline cargoes through tenders for early March loading. It is now in talks with buyers to settle those supplies. MRPL has swap agreements with traders to receive crude cargoes in exchange for supplying refined fuel.
IRGC claims control over Strait of Hormuz, warns vessels
According to the latest update Iran’s Islamic Revolutionary Guard Corps (IRGC) has claimed its controls on the Strait of Hormuz and warned that any vessels seeking to pass through the waterway risk damage from missiles or stray drones.
India’s crude dependence on Middle East under spotlight
Strait of Hormuz handles around one-fifth of global oil consumption. Indian refiners fill about 40% of their crude needs through purchases from the Middle East, in addition to sourcing from spot markets and processing domestic oil.
A Reuters report also noted that India’s crude oil inventories can meet demand for about 25 days. Indian Refiners also hold a 25-day inventory of gasoil, gasoline and liquefied petroleum gas. IDFC FIrst Bank noted that “a temporary workaround could be increasing crude oil imports from Russia’.
However, important to note in January, MRPL said it was exploring purchases of Venezuelan oil after the refiner halted imports of Russian oil to comply with Western sanctions.