Indian Oil plans shipping investments to strengthen energy security

In a call with investors, public sector Indian Oil Corporation has said that it is working to purchase a few (shipping) vessels, to manage energy trade and optimise costs.

“Even today you have to optimise between your time charter vessel and the voyage charter vessel. Charter vessels helped us significantly in managing not only the supplies, but optimising the cost also,” said Anuj Jain, director (finance).

Under time charter a vessel is hired for a specified period of time, while under voyage charter, the vessel is hired to transport cargo between specified ports.

Indian Oil is said to have received approval from its board to do so, following which the company placed tenders in the market to buy some vessels.

During 2025-26, the company had signed a Memorandum of Understanding with Shipping Corporation of India, Bharat Petroleum and Hindustan Petroleum to form a joint venture to acquire, own and operate “a fleet of Indian-flagged vessels, including LPG carriers, crude oil tankers and product tankers to strengthen India’s energy transportation infrastructure, enhancing supply-chain resilience, and promoting the development of indigenous shipping capabilities through priority procurement from Indian shipyards”.

The move is being called strategic having come at a time when geopolitical uncertainties caused oil prices to spike through most of 2026. Trade has had to keep up with changes in policy due to out-of-control geopolitical decisions.

The Indian basket crude price, which averaged around $65-$70 per barrel in February 2026, crossed $100 per barrel for long periods after that. Indian imports of oil and gas have since expanded from the Middle East and Russia to Venezuela, Iraq and even the African markets.

To ensure LPG (liquefied petroleum gas) security, Indian Oil retains inventory on its books that can go up to a few weeks. When the prices go up the company books inventory gains but when prices start coming down, inventory losses have to be carried also.

For the second quarter of financial year 2026-27, the company reported a net profit of ₹21,630 crore compared to net loss of ₹2,661 crore in the preceding quarter.