Ship-to-Ship Oil Transfers Surge Off India’s Gulf of Kutch as Hormuz Shuttle Routes Fill Up

Ship-to-ship (STS) oil transfers are spreading eastward to the Gulf of Kutch off India’s Gujarat coast, as the established swap zones off Fujairah in the UAE and Sohar in Oman reach their operational limits, according to tanker-tracking data from Vortexa cited by Oilprice.com, gCaptain and Gulf News. Vortexa senior market analyst Varalika Pant said moving cargo onto larger ships at the new waypoint carries low risk in itself: “The real risk lies in getting the barrels out of the west of Hormuz.”

Vortexa data shows 82 cargoes, equivalent to around 680,000 barrels per day, were transferred onto larger vessels in the Gulf of Kutch in September, as Gulf producers work to keep crude moving toward Asian buyers despite the elevated risk to tankers transiting the Strait of Hormuz directly. Separate tracking cited by Bloomberg describes two VLCC-to-VLCC transfers in the area as the first eastbound Gulf crude handoffs observed there since the Iran war began, with the receiving ships bound for Singapore and South Korea.

Why the Shuttle Model Is Running Out of Room

The Fujairah and Sohar transfer zones became the default workaround after direct Hormuz transits grew riskier amid the conflict, letting tankers load in the Gulf, make a short run to the Omani or UAE coast, and transfer cargo to larger ships that avoid repeated passages through the strait. Vortexa estimates a full VLCC-to-VLCC transfer now takes five to six days and that VLCC freight costs exceed $1 million a day, a cost structure that has pushed 57% of Gulf crude exports through some form of ship-to-ship transfer as of July, up from just 12% a year earlier. As congestion at the nearer zones builds, some of that volume is now shifting further from the strait’s mouth, toward India’s west coast, extending both transit time and cost for cargoes that already carry a war-risk premium.

Pricing Reflects Who Can Avoid Hormuz Altogether

The clearest sign of how unevenly the disruption is being felt is in pricing. Iraq, which has no pipeline route bypassing Hormuz, is offering Basrah Medium crude for October loading at a $34.50-per-barrel discount to regional benchmarks, and Basrah Heavy at a $37 discount, according to Oilprice.com. The UAE, by contrast, commands a premium for Murban crude, which flows by pipeline directly to the export terminal at Fujairah, outside the strait entirely. That gap, roughly $70 per barrel between Iraq’s heaviest discount and the UAE’s premium grade, is as much a measure of chokepoint exposure as of crude quality.

The widening use of STS transfers follows a string of direct attacks on shipping in and around the strait since the conflict began, including a wave of tanker strikes that pushed Brent above $102 a barrel and a later escalation in which Iran threatened to extend tanker attacks beyond Hormuz itself, sending oil above $106. The same risk premium has already reshaped US export flows: Asian refiners have abandoned US Gulf crude as supertanker rates hit $82 million per voyage, a separate consequence of the same tanker-market squeeze now pushing activity into the Gulf of Kutch.

An Indicator With Limits

Gulf of Kutch volumes are still a fraction of the roughly 25 million barrels that TankerTrackers estimated were tied up in at least 15 simultaneous ship-to-ship operations in the Gulf of Oman in August, and analysts differ on how far the eastward shift will extend. What the data does show clearly is that the shuttle-shipping workaround itself, not just direct transits through Hormuz, now has capacity limits of its own, and that producers and buyers are absorbing longer routes and higher freight costs rather than reducing volumes moving toward Asia.

Sources: Oilprice.com, “Ship-to-Ship Oil Transfers Surge Off India’s West Coast,” October 15, 2026 (Vortexa data, Iraq and UAE pricing, analyst quotes); gCaptain, “Tanker Congestion Shunts Vital Oil Transfers Farther From Hormuz,” October 2026; Gulf News, “Ship-to-ship transfers keep Gulf oil moving outside Hormuz as direct traffic hits multi-month low,” October 2026 (Bloomberg/Vortexa tracking data, Kutch waypoint).

Related: Strait of Hormuz: Oil Flows, Alternative Routes and the Latest Disruptions

Illustrative image. Photo: U.S. Navy photo by Photographer's Mate 1st Class David C. Lloyd, Public domain, via Wikimedia Commons — source