Oil prices, gas prices, and freight rates are all rising simultaneously, marking a new phase of heightened tension in the global energy market.

Fearnleys, a shipbroker, stated in its latest weekly report covering the week ending September 9: “The VLCC fixture list is now extremely tight, and no one would be surprised if we see Fujairah/Far East break through the WS 400 threshold soon—though it may sound crazy.” The shipbroker added: “Oil still needs to transit the Strait of Hormuz, and the Iranians have intensified efforts to prevent this. It’s a fragile situation.” Alex Grant, Equinor’s Global Head of Crude, Products & Liquids Trading, told Bloomberg on the sidelines of the APPEC oil conference in Singapore: “There are quite a few bottlenecks simultaneously.” “All of these are exerting considerable pressure on the market, concentrated particularly in shipping freight rates.” (II) As Gulf tensions escalate, VLCC daily charter rates surge to $800,000 On September 11, 2026, Zero Hedge—a sectoral institution—published an article titled “Oil Prices” on its website, noting that the Baltic Exchange’s benchmark Middle East-to-China VLCC rate had surged to $800,000 per day, following the U.S. military’s sinking of five Iranian-linked tankers; Kpler forecasts VLCC daily earnings will remain above $100,000 into early next year—more than double the historical normal level of approximately $45,000; despite risks, ship-to-ship transfers in the Gulf of Oman continue to sustain crude oil flows through the Strait of Hormuz at roughly 10–15 million barrels per day. The Baltic Exchange’s benchmark VLCC freight rate for the Middle East-to-China route has surged to an astonishing $800,000 per day. With Tehran threatening further escalation after the U.S. sank five Iranian-linked tankers, the near-term outlook for stabilization remains uncertain. The sharp rise in freight costs signals that crude oil and refined products continue to move—but the cost of transporting them from the Persian Gulf region to global markets is becoming increasingly expensive. According to Bloomberg, the average freight cost for U.S. VLCC cargoes from the Gulf of Mexico to Asia stands at around $29.5 million per voyage—approximately $15 per barrel—not including additional war-risk premiums or unexpected delays. Kpler forecasts VLCC daily earnings will remain above $100,000 into early next year, compared to historical levels exceeding $45,000. Morgan Stanley analysts note two-year time-charter rates could rise another 20%–30%. Manu Sehgal, Vice President of Strategy & Feedstock Supply at HPCL-Mittal Energy, told Bloomberg: “Crude oil production exists, but what impedes its flow is transportation—especially shipping.” A large number of tankers currently conducting ship-to-ship transfers in the Gulf of Oman are helping sustain oil flows through the Strait of Hormuz. Earlier this week, Vitol’s CEO estimated about 10 million barrels per day pass through the strait, while Goldman Sachs analysts placed the figure closer to 15 million barrels. Zero Hedge concluded that since its launch, the Baltic Exchange’s new Oman Gulf-to-East Asia benchmark freight rate has surged by 85%, reaching nearly $386,000 per day this week.

India has raised its crude oil windfall tax to ₹3,200 per tonne. What impact does this have on crude oil producers?

In April 2022, the war-induced surge in international oil prices prompted gasoline and diesel prices to rise by ₹10 per liter starting mid-March; subsequently, during the pandemic, excise duties on gasoline and diesel were increased, and a later round of consumption tax cuts fully reversed those hikes—reducing taxes by ₹13 per liter for gasoline and ₹16 per liter for diesel. As a result, although consumers were unaffected, these three companies collectively incurred losses of ₹210 billion in the first half of FY 2022–23, pushing reform initiatives into the background. In June 2022, oil prices were expected to normalize and fall below $120. How did Indian Oil Corporation view the oil price outlook? Harish Madhav said: “I don’t think the $60–$70 range is likely in the current FY 22–23 or over the next 10–12 months. But I do believe some adjustment will occur, as the market will inevitably cool down. The $120 range certainly cannot persist long-term. (Regarding the windfall tax) I’d say all this is just rumor. There’s been no concrete progress on this windfall tax—only discussions within circles, and to our knowledge, no formal proposals have yet emerged.” In July 2022, refining margins for diesel, gasoline, and ATF plummeted, while crude oil prices retreated from their June peak, reducing refiners’ excess profits. On July 1, the government imposed export duties—₹6 per liter (or $12 per barrel) on gasoline and ATF, and ₹13 per liter (or $26 per barrel) on diesel—and levied a windfall tax on domestically produced crude oil (₹23,250 per tonne, or $40 per barrel). Private refiners sought to sell fuels overseas to capitalize on strong refining margins rather than selling domestically. In November 2022, “Give me a break”: U.S. President Joe Biden sharply criticized oil industry profits and threatened to impose a windfall tax. In December 2022, U.S. oil major ExxonMobil sued the European Union, demanding the mandatory repeal of the EU’s newly imposed windfall tax on oil groups. The supermajor argued that Brussels’ imposition of up to €25 billion in taxes exceeded its legal authority. In January 2023, a report indicated that oil companies were selling gasoline with a ₹10-per-liter profit, without lowering retail prices—because they needed to recoup past losses (a ₹6.5-per-liter loss on diesel). State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) had not adjusted gasoline and diesel prices in line with costs over the previous 15 months. Ranjit Rath, Chairman of IOC, stated the company was exploring legal and diplomatic channels to repatriate $150 million in dividends from Russia. Due to banking restrictions and Western sanctions, dividends owed to IOC, BPCL, and ONGC remained stranded in Russia. In March 2023, the Indian government slightly raised the windfall tax on domestically produced crude oil—from ₹4,350 to ₹4,400 per tonne.

India's HPCL posts quarterly profit drop on higher costs, tax expenses

1 day ago

Hindustan Petroleum Corp reported a 9% drop in Q2 profit due to rising crude prices and tax expenses, despite improved refining margins and government compensation aiding sales.

reuters

2026-10-22

India's HPCL posts quarterly profit drop on higher costs, tax expenses

India's HPCL posts quarterly profit drop on higher costs, tax expenses

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