Indian refiners have stopped loading crude oil from Iraq, citing security risks in the Strait of Hormuz. The move adds fresh uncertainty to global oil markets already watching for supply disruptions.
Why Indian refiners stopped loadings
The decision came after an assessment of the security situation in the Strait of Hormuz, a narrow waterway that connects the Persian Gulf to the Gulf of Oman. Indian refiners, which had been regularly taking Iraqi crude, now see the route as too risky. The halt affects shipments that would have passed through the strait, a critical passage for oil tankers heading to Asia.
Iraq is a major supplier of crude to India, and the stoppage means refiners must quickly find alternative sources. The security risks in the strait are not new, but the decision to halt loadings suggests a heightened level of concern.
The prediction market's take
Separately, a prediction market is pricing a 2.5% probability that West Texas Intermediate crude oil will reach $110 per barrel in July 2026. That's a low chance, but it shows some market participants are betting on a price spike. The halt by Indian refiners could be a factor that pushes prices higher, though the market's assessment was made before this development became known.
The 2.5% figure implies that, under current conditions, a $110 WTI price is seen as unlikely but not impossible. If more buyers follow India's lead and avoid the strait, that probability could rise.
What comes next
Indian refiners now face the task of securing crude from other producers. Options include suppliers in the Middle East that don't require transit through the Strait of Hormuz, or longer-haul sources from Africa or the Americas. Each alternative comes with its own costs and logistical challenges.
It's unclear how long the halt will last. The security situation in the strait could improve, or it could worsen. Other major crude buyers in Asia are watching closely. If they also decide to avoid the strait, the impact on global oil flows could be significant.
The prediction market's 2.5% probability for a $110 WTI price in July 2026 may shift as more information emerges. For now, the market is pricing a low chance, but the Indian refiners' move adds a new variable.
