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India’s IOC releases provisionally hired China-linked VLCC to import Mexican crude – Platts

Indian Oil Corp.store tank (India Oil)

Sameer C. Mohindru; Jonathan Heng, Platts S&P Global

SINGAPORE
energiesNet.com 03 03 2023

India’s state-run Indian Oil Corp. has released a VLCC – after being briefly placed on subjects – when it was learnt that the super tanker was controlled by a Hong Kong-based commercial operator, as stringent government restrictions debar use of China-linked ships to move cargoes in or out of the country, several market participants said March 1.

India banned use of any ship linked to mainland China, Hong Kong, and Macau almost two years ago after the re-eruption of a border dispute with Beijing. This includes ships registered in or having flag of or having an owner or operator registered in China and its islands. India has alleged that China occupied vast tracts of Indian territory in 2020, a charge refuted by China.

India imports more than 4 million b/d of crude, equivalent to more than two VLCCs daily, according to government data. The restriction on Chinese tonnage reduces the supply for India-related trade and at times even increases freight costs.

IOC had placed on subjects the 2011 Japan-built, Mermaid Hope, for March 22 crude loading on the East Coast Mexico-Paradip route for delivery of a 270,000-mt crude cargo to its refinery along the country’s East Coast before being released, brokers said.

When contacted by S&P Global Commodity Insights, a senior IOC executive confirmed that the company does not charter any ship whose flag, registration or ownership is linked to China and its islands.

While the Mermaid Hope carries a Panama flag and its head owner, Brave Deer Shipping, is registered in Liberia, but the same company is registered in Hong Kong as its commercial operator, according to official records accessed by S&P Global.

This VLCC was provisionally placed on subjects because its registration is in Liberia and its disponent owner is Singapore-based Clearlake, a tankers’ broker said. In this fixture, Clearlake had relet or chartered out the VLCC to IOC but the registration of its commercial operator in Hong Kong cannot be overlooked in context of the rules framed by the Indian government and was therefore eventually released, sources said.

When a company takes a ship on time charter from the registered, or head owner, it is called the disponent owner, which is Clearlake in this case.

The same rules debaring use of China linked ships are invoked while India’s state-owned steel mills such as SAIL and RINL charters dry bulk ships for moving metallurgical coal for its plants based along India’s east coast. Both SAIL and RINL are large importers of metallurgical coal from Australia’s east coast, which are instead shipped on non-China linked tonnage, according to market participants.sp

spglobal.com 03 01 2023

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