MRPL Bars Suppliers From Hormuz and Red Sea in First Indian Refinery Dual Restriction
India's MRPL excluded both chokepoints from a spot crude tender for up to 1 million barrels, the first such restriction by an Indian refinery amid mounting shipping disruptions.
India's Mangalore Refinery and Petrochemicals Ltd. told crude suppliers on Monday (2026-07-27) to avoid both the Strait of Hormuz and the Red Sea, inserting the restriction into a spot tender for up to 1 million barrels, OilPrice.com reported. MRPL is the first Indian refinery to embed a dual-route exclusion into tender terms.8
Embedding route restrictions in tender language rather than absorbing the cost through freight premiums is a different order of signal from physical buyers. It narrows the pool of deliverable crude considerably for a buyer in Asia, where most volumes arrive from Middle Eastern producers whose export infrastructure runs through one waterway or the other.8
ICE Brent front-month was trading at $85.35 a barrel on Monday (2026-07-27), down 2.80% on the session, well below the roughly $96 level reached on Thursday (2026-07-16) when the United States launched further strikes on Iran and the benchmark hit its recent peak. The front-month had settled at $91.01 on Monday (2026-07-21), a 2% gain on that day, as the US was on its tenth consecutive day of strikes against Iranian targets and President Donald Trump vowed Tehran "will pay" for killing American soldiers. Prices have retreated sharply since.7,3
Products have not followed crude lower. RBOB gasoline was up 5.38% and heating oil advanced 3.27% on Monday (2026-07-27), even as the crude benchmark slipped. That divergence suggests traders are pricing in supply tightness in refined products, possibly from refinery throughput adjustments as buyers work around constrained routes, rather than a broad crude supply shock at the benchmark level. [LIVE PRICES]
The shipping data explains the unease. Visible traffic through the Strait of Hormuz has sunk, while Red Sea vessels were observed making unusual maneuvers as recently as Wednesday (2026-07-22), including at least one U-turn, Rigzone reported. At the southern end of the Red Sea, conditions are worsening. "The Bab el-Mandeb risk picture is deteriorating," an analyst at MarineTraffic told NBC News on Wednesday (2026-07-22), referring to the strait that is the gateway to the waterway.4,6
Yemen's Houthi rebels escalated their campaign by threatening a maritime blockade of Saudi Arabia, warning shipping companies they would target vessels calling at Saudi ports in any location, regardless of flag or cargo. All of Saudi Aramco's 4 million barrels per day of crude exports now pass through routes under some form of threat.2
Saudi Aramco appeared to move ahead of the escalation. The company shipped record volumes from its Red Sea export terminal at Yanbu in the days before Houthi threats intensified, Rigzone reported. Yanbu has functioned as an alternative export route for Saudi crude that bypasses the Strait of Hormuz, but with Houthis explicitly targeting that corridor, the bypass itself is now under pressure.2,5
A third risk extends to Central Asia. Kazakhstan's Caspian Pipeline Consortium terminal on Russia's Black Sea coast, through which the country has at times shipped close to 1.8 million barrels per day, has been cited alongside the Gulf chokepoints as a simultaneous threat, Rigzone reported.3
Analyst price targets have risen to reflect the scale of the disruption. Kaynat Chainwala of Kotak Securities said a move in ICE Brent above $100 "looks increasingly plausible" with Hormuz, the Red Sea and the Black Sea route all under stress simultaneously and the Yanbu bypass threatened. Goldman Sachs cited a scenario in which Brent climbs above $120 a barrel in the fourth quarter if Hormuz disruptions persist, though Goldman framed that as a tail risk rather than its base case, with the broader outlook's risks "tilted to the upside."5,1
Gulf crude flows have fallen below 45% of pre-war levels, Goldman Sachs said, making Red Sea transit increasingly central to Asian supply chains. The Houthi blockade threat on Saudi ports puts that fallback directly in jeopardy.1
But the immediate question for traders is whether other Indian and Asian refiners adopt MRPL's template. Any widening of buyer restrictions would tighten spreads for Atlantic Basin and North Sea grades as buyers seek cargoes that avoid Middle Eastern routes altogether. RBOB gasoline at $3.33 a gallon and heating oil at $4.11 on Monday (2026-07-27) already suggest product markets are running ahead of where the crude benchmark currently sits.8,1,4