India's state-run Hindustan Petroleum Corp (HPCL) is increasingly buying Middle Eastern crude on a delivered basis, as producers with stranded cargoes offer discounts to offset higher freight costs, its chair Vikas Kaushal said on Friday, October 23, on an analyst call after the company's September-quarter earnings, Reuters reported via The Hindu BusinessLine. Delivered cargoes previously accounted for about half of HPCL's crude imports.
"For all practical purposes right now almost everything we are looking at is on landed basis except where we think we can send a ship and pick it up cheaper," Kaushal said, according to Reuters. The company is also increasingly opting for delivered cargoes to avoid exposing its own vessels to attacks and other risks linked to the regional conflict, Reuters reported. HPCL directly operates three refineries with a combined capacity of 670,000 barrels per day.
Freight costs surge
Freight rates doubled in July to September from the previous quarter, HPCL finance chief Srividya Venkataraman said, with the cost of shipping crude on a Suezmax tanker rising to about $9 per barrel from $3 to $4 in the June quarter, Reuters reported. Informist's coverage of the same analyst call likewise reported that HPCL is buying a lot on a delivered basis and that freight rates doubled between the September and June quarters.
Source: Informist — Analyst Concall: HPCL on delivered crude buying and freight rates (Oct 23, 2026)
Kaushal said the impact on landed prices might not be as large as it appears from outside because producers are also stuck, adding that returns to producers with stranded cargoes were much lower than publicly reported, Reuters reported. He also said HPCL expects to start producing high-sulphur fuel oil at its 180,000-barrel-per-day Rajasthan refinery in December; the refinery is operating at 60 per cent capacity.
What is solid
- HPCL chair Vikas Kaushal said on the October 23 analyst call that almost everything the refiner is looking at is on a landed/delivered basis — reported by Reuters and corroborated by Informist's concall coverage
- Reuters reported freight rates doubled in July-September and Suezmax shipping costs rose to about $9 per barrel from $3-4 in the June quarter, per HPCL's finance chief
What is only claimed
- The size of the discounts producers are offering on stranded cargoes was described by HPCL's chair but not quantified in the reports — no specific discount figure has been published