The sustained closure of Gulf transit routes is forcing a rapid, costly restructuring of the India-MENA trade and energy corridor. Egypt is stepping in to offer its Red Sea storage facilities as Indian refiners book crude deliveries from Saudi Arabia’s Red Sea port of Yanbu. Indian Airlines are absorbing up to USD 24 mn in immediate losses to reroute flights and clear passenger backlogs. On the water, exporters are pulling back an estimated USD 1.5 bn in stranded cargo as shipping lines impose war-risk surcharges that have spiked sharply.

Refiners pivot to Saudi’s Yanbu

Indian Oil Corporation (IOC) has secured crude cargoes loaded from Saudi Arabia’s Red Sea port of Yanbu as disruptions linked to the US-Israel conflict with Iran begin reshaping oil export logistics across the Middle East, Reuters reports. Saudi Arabia has increased shipments from its Red Sea terminals as tensions threaten traditional Gulf shipping corridors through the Strait of Hormuz.

Supply adjustments: Indian energy buyers have already diversified sourcing by increasing purchases of discounted Russian crude following a sanctions waiver by the US on Russian crude. India is also considering sourcing Russian liquefied natural gas if commercially viable supplies become available.

Egypt opens Red Sea oil storage to int’l players: Egypt has offered 10 crude and petroleum storage facilities for lease in the Red Sea, a senior government official tells EnterpriseAM. Egypt aims to attract oil deliveries from Saudi Arabia, Kuwait, Iraq, and Qatar, while doubling storage capacity at its Sumed- and Ras Badran-associated facilities, the source said.

Egypt is also offering its Sumed pipeline from Ain Sokhna to Sidi Kerir to facilitate the transfer of Saudi crude oil from Yanbu to the Mediterranean as a workaround to the Hormuz Strait closure. Egypt already has existing contracts with Saudi Arabia’s Aramco, as well as Kuwaiti and Qatari companies, for the pipeline’s operation, the source added.

Why this matters: Today is day T-minus 18 out of a 25-day countdown before GCC oil producers run out of storage space, according to analysts at JPMorgan. If the strait remains closed beyond this window, producers may have to stop output entirely because there will be nowhere left to store the oil.

Pulling back stranded cargo

Indian exporters have begun withdrawing consignments stranded at ports and airports through the back-to-town process after supply chains were disrupted by the ongoing US/Israel-Iran conflict, Hindu Businessline reports. The mechanism allows exporters to pull back cargo from customs areas when shipments are cancelled, flights are suspended, or export orders are withdrawn.

Why it matters: Industry estimates suggest up to USD 1.5 bn in cargo is now at risk of diversion, delayed delivery, or forced return to India, raising the prospect of major supply chain disruptions as the war stress tests the India-GCC trade corridor. An estimated 40-45k containers carrying Indian goods are currently stranded at sea or at international ports. The stranded shipments include about 0.4 mn tonnes of basmati rice, and exporters of perishable goods warn that prolonged delays could result in heavy financial losses.

Government steps in: The Central Board of Indirect Taxes and Customs has issued guidelines to facilitate cargo returns when shipments are stranded due to the Strait of Hormuz disruption to prevent congestion at Indian ports and terminals.

Ins. remains a bottleneck

India is seeking operational clarity on a proposed INR 1.66 tn (USD 20 bn) maritime reins. facility by the US International Development Finance Corporation (DFC) aimed at supporting shipping activity through Hormuz, Hindu Businessline reports. India’s Oil Ministry is already in discussions with US authorities but is awaiting details on vessel eligibility, insured amounts, and operational modalities before deciding whether to participate.

Ins. framework: The plan, approved by US President Donald Trump, would deploy maritime reins. — including war-risk coverage — in coordination with US Central Command. Coverage would initially extend to hull and machinery as well as cargo risks for vessels that meet the eligibility criteria.

Why it matters: Maritime insurers are rapidly repricing risk across Gulf shipping lanes amid threats to tankers transiting the Strait of Hormuz. War-risk premiums have surged, in some cases by over 1,000%.

Aviation

Indian airlines are mounting a massive recovery effort to clear a backlog of stranded passengers, as the conflict in the Middle East has disrupted Gulf airspace since 28 February.

Special evacuation flights: The Air India Group will operate 32 additional non-scheduled flights between India and the UAE today to bring stranded travellers home and clear passenger backlogs, according to a press release. IndiGo, India’s largest carrier, is also restoring services in phases, operating about 17 departures, or 34 flight sectors, to eight Gulf destinations while resuming routes to London, Manchester, and Amsterdam, according to a post on X.

Why it matters: Indian airlines are facing daily revenue losses and cost increases estimated at INR 1.5-2 bn (USD 18-24 mn). This comes on the back of a combination of cancelled high-yield international tickets and an up to 22% increase in fuel burn as flights to the Western hemisphere reroute via the Omani and Egyptian routes to avoid UAE and Iran airspaces.

Scale of disruption: Indian airlines cancelled 279 international flights on Sunday as the US-Israel-Iran conflict forced widespread airspace closures across the Gulf.

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