Strait of Hormuz shipping disruption is pushing up the cost of moving crude oil to Asia, and Indian refiners are among the buyers exposed. Iran’s foreign minister said on October 18 that Tehran’s offer to reopen the strait within days is still on the table, but no deal has been announced. Maritime agencies report a sharp rise in attacks on merchant ships, and the International Energy Agency says Asia-bound oil freight has hit record levels.
Key points
- Reuters reported on October 18 that Iranian Foreign Minister Abbas Araqchi said Iran’s proposal to reopen the Strait of Hormuz remains on the table. The strait could reopen within six days if Washington accepts Tehran’s conditions.
- The UK Maritime Trade Operations centre recorded 15 attacks on ships from October 6 to 14, 11 of them in four days, Al Jazeera reported.
- The IEA put supertanker freight from the Middle East Gulf to Asia at around $36 a barrel in early October, more than five times the pre-war cost.
Where diplomacy stands
Araqchi told Iranian media on Sunday that Iran was reviewing a US reply to the plan, which it first presented in mid-September after an interim ceasefire collapsed, Reuters reported. Its conditions include lifting the US blockade of Iranian ports, lifting US sanctions on Iranian oil exports and ending hostilities on all regional fronts.
The two sides remain apart on sequencing. Reuters reported that Washington wants Iran’s nuclear programme addressed from the outset, while Tehran says talks should first focus on reopening the strait and restoring security there. Before the war, the waterway carried about a fifth of global oil and liquefied natural gas trade, Reuters noted.
Maritime safety and traffic
Al Jazeera reported on October 14 that the US Navy-led Joint Maritime Information Center rated the threat to merchant shipping as “severe”, its second-highest level. The UKMTO figures in the same report counted 15 attacks between October 6 and 14. Tanker traffic has also swung sharply. Kpler data cited by Al Jazeera showed nearly 20.8 million barrels passing through the strait on October 8 but only 2.9 million barrels on October 11, compared with a pre-war average of 17.1 million barrels a day.
On October 17, Iran’s Revolutionary Guards said two oil tankers caught fire after hitting naval mines in the strait, according to Al Jazeera and AFP. Indian crews have also been affected by the conflict; our earlier report covered two Indian seafarers missing after vessel attacks near Hormuz.
What it means for Asian and Indian refiners
A Reuters report on the IEA’s monthly oil report said Asian refiners face the highest transport costs, partly because some cargoes moving through Hormuz are transferred to secondary tankers for onward delivery. The IEA said margins for Asian refiners processing medium sour crude turned negative in September. Writing for Reuters on October 19, columnist Ron Bousso said freight and insurance usually make up about 3% to 7% of a barrel’s delivered price. For some refiners, he wrote, that share can now reach as much as 30%, citing ROI calculations. He cited HiLo Analytics data putting Asian gross refining margins at about $40 a barrel in October, against freight of about $33.
India is adjusting its approach. Bloomberg reported on October 1 that Indian refiners had started hiring tankers to sail through Hormuz and load crude inside the Gulf, after relying on sellers to deliver cargoes. Indian Oil, Reliance Industries, Bharat Petroleum and HPCL-Mittal Energy bought Iraqi crude on a free-on-board basis, which leaves shipping to the buyer. Kpler data cited by Bloomberg showed about 1.3 million barrels a day flowing through the strait toward India in September. In August, India’s Directorate General of Shipping softened its advisory so that Indian seafarers could serve on that route with their consent.
What has not been confirmed
No agreement to reopen the strait has been announced, and the timeline Araqchi described depends on US acceptance of Iran’s conditions. Iran’s account of the October 17 mine strikes, including the claim that one tanker crossed “with US support”, had not been independently confirmed in the reports reviewed. Freight figures vary by route, vessel and date. The full effect on Indian fuel prices has not been officially stated.
Why it matters
Asia has historically relied on the Middle East for around 60% of its oil supplies, Bousso noted, and Bloomberg put India’s crude imports from the region at about 2.8 million barrels a day. Higher freight, insurance and crew costs can squeeze refinery margins and eventually feed into fuel and import bills. For India, how long the disruption lasts and whether the shipping lane stays safe matter as much as the headline oil price. Crews and operators should follow UKMTO, JMIC and Directorate General of Shipping advisories.
Sources
- Reuters via The Spokesman-Review, October 18, 2026: Iran urges U.S. to accept Hormuz proposal
- Al Jazeera, October 14, 2026: attacks and oil flows
- Al Jazeera and AFP, October 18, 2026: Iran says two tankers hit mines
- Reuters via BOE Report, October 14, 2026: IEA on record tanker rates
- Reuters column by Ron Bousso via BOE Report, October 19, 2026
- Bloomberg via Rigzone, October 1, 2026: India oil refiners shift tactics
Reported October 20, 2026 (India Standard Time), using AI-assisted drafting and source checks. Original AI-assisted editorial illustration by Taaza Khabar, generated October 20, 2026; conceptual scene, not a photograph of the event.
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