Bunkering operations could also come in the ambit of this catastrophic wave that has engulfed India, although no major disruptions have been noted yet as demand has been lackluster, bunker industry sources said.
The impact on global shipping logistics from India’s isolation could become a very significant market disruptor by causing delay in supply of ships, said Ole-Rikard Hammer, oil and shipping analyst with Oslo-based Arctic Securities. This will obviously tighten the tankers’ supply, Hammer told S&P Global Platts.
There are serious concerns over several ports refusing to allow crew changes in those ships which have called on Indian ports over the previous 14 days.
Singapore has already banned ship crew changes for those with recent India-related travel history while Fujairah — another major bunkering hub — has also prohibited such crew changes from vessels arriving from India.
Voyage from India to several ports in Asia is less than two weeks, and this implies that the ship will have to idle away for a few days before being eligible to enter its next port of call for bunkering, loading, unloading, crew change, dry docking or even routine maintenance.
Bunkering schedules will go awry, daily earnings will be hit and ships will seek to offset it by seeking higher freight for India-bound voyages, several shipping sources in Asia and Europe said.
If things play out similar to what was seen last year during the first lockdown in India, there will be a sharp drop in local demand and most of this difference will be diverted for exports, said Ralph Leszczynski, who heads research at Genoa-based shipping broker and consultancy, Banchero Costa.
Due to ongoing refinery maintenance season in North Asia, Indian refiners may capitalize on this by giving a boost to product exports, particularly to Southeast Asia and Australia, Leszczynski said. This will help revive freight of Long Range I and II tankers, as until now refinery utilization levels in India has remained high, he said.
According to the latest government data, India’s average run for all categories of refineries in India rose to 99% in March compared with 97% in the previous month. An Indian refinery source said in the week ended May 8 that run rates were still around 90%-95% and there was no immediate plan to cut them.