VLCC Rates Top $1M/Day as Oil Transfers Shift to Gulf of Kutch

For supply chain and logistics planners, the emergence of the Gulf of Kutch as an STS transfer node signals a structural shift in oil logistics—not just a temporary war disruption. Congestion near Oman and the UAE has exhausted existing STS capacity, forcing operators farther toward India to decant VLCC cargoes and adding transit days, bunker costs, and scheduling variability to East Asia deliveries.

Persian Gulf oil producers are relocating critical ship-to-ship (STS) transfer operations to the Gulf of Kutch off the coast of Gujarat, India, according to tanker-tracking data compiled by Bloomberg and energy data provider Vortexa and published on October 1, 2026. The move is a direct response to congestion in waters just outside the Strait of Hormuz, where war-hit export logistics have become increasingly strained. Two very large crude carriers recently completed STS transfers in the Gulf of Kutch, with receiving vessels now signaling destinations in East Asia, specifically Singapore and South Korea. These are the first eastbound Gulf crude cargo transfers observed in the area since the Iran war began.

“

Two very large crude carriers recently completed STS transfers in the Gulf of Kutch, with receiving vessels now signaling destinations in East Asia, specifically Singapore and South Korea.

The broader context is seven months of conflict-driven disruption through the Strait of Hormuz. Since the Iran war constricted flows through the narrow shipping corridor, key Middle East exporters have relied on a workaround: shuttle cargoes through the chokepoint in smaller or more covert patterns, then decant them onto other VLCCs in safer waters near Oman and the United Arab Emirates. That pattern has kept some exports moving but has progressively overwhelmed the available STS infrastructure. The Gulf of Kutch represents a second-stage adaptation, pushing transfer operations farther out to sea and farther from the conflict zone.

The shift is not occurring in isolation. In recent weeks, Yemen's Houthi rebels have menaced Saudi Arabia's back-up export route through the Red Sea, forcing the kingdom to route greater volumes through Hormuz. That has compounded congestion at a time when Vortexa estimates the region's capacity for STS procedures may have reached its limit. With near-Hormuz transfer zones saturated, India's west coast offers a new safety valve, but one that adds significant distance to eastbound deliveries.

Operationally, every tanker diverted to the Gulf of Kutch adds voyage time, bunker fuel consumption, and scheduling uncertainty for East Asian refiners. The additional distance and the bottleneck are directly linked to the cost of hiring a supertanker, which has surpassed $1 million a day. For charterers that can still find tonnage, these rates are translating into higher per-barrel freight costs; for refiners and fuel buyers, delayed or diverted shipments add upward pressure to crude and refined product prices. A $1 million-a-day VLCC hire rate is a market signal that available tonnage is scarce relative to route-adjusted demand.