Indian Ports struggle with massive demand as Ships Re-Route amid Red Sea Crisis

While India contends with supply shortages, Sri Lankan ports are experiencing a notable increase in activity.

According to S&P Global Commodity Insights, the demand spike has been primarily attributed to longer voyages by ship owners and charters to circumvent the Red Sea region. With the result,  ports on India’s west coast, particularly Kochi and Mumbai, are grappling with disrupted VLSFO (Very Low Sulfur Fuel Oil) supplies, exacerbating the situation.

A trader based in Gujarat highlighted the substantial rise in demand, and told S&P Global, “Demand has substantially increased, almost by 30 per cent across Mumbai, Kochi and Gujrat ports. Long haul vessels are calling more often now. The volumes that were being lifted at King Abdullah port, Yanbu, Djibouti and Suez Canal have now shifted to Indian and Sri Lankan Ports.”

The supply crunch at Indian ports, particularly Kochi, has further bolstered demand at Sri Lankan ports like Colombo and Hambantota.

Despite the increased demand, Sri Lankan ports remain well supplied through consistent inflows from Fujairah and Singapore.

In response to supply shortages in India, traders have redirected their inquiries to Sri Lanka, further driving up demand in the region…supply constraints persist in India, particularly at major ports like Kochi and Mumbai.

Meanwhile, an IOCL official shed light on the challenges faced by refineries, stating, “The IOCL refinery in Gujarat underwent a partial shutdown in February while the demand surged due to the Red Sea. Initially, the refinery was producing in line with market demand.”

With the spotlight on India’s bunker fuel production, it’s revealed that the entire production comes from only three refineries, out of which HPCL and BPCL have lowered output.

In Haldia, while demand remains high, supply falls short of requirements due to maintenance issues at the local refinery.