Indian refiners plan to resume buying Iranian oil after Washington temporarily eased sanctions to ease an energy crisis triggered by the ongoing US-Israeli war against Iran, a Reuters report said.
Meanwhile, refiners in other Asian countries are also exploring similar moves. The renewed interest comes as conflict in West Asia has disrupted shipping lanes, threatened oil flows and forced major energy-importing countries to seek alternative supplies.
Livemint could not independently verify the reports.
Indian refinery officials said they would buy Iranian oil and were awaiting further instructions from the government and clarification from the United States on details such as payment terms, the agency said.
US eases sanctions on Russian oil
The latest exemption from sanctions on Iranian oil follows a similar move by the Trump administration on Russian oil. Washington previously announced that US sanctions on Russian oil would not apply for 30 days to supplies that had already been loaded onto tankers.
US sanctions will not apply for 30 days on shipments of Russian oil that have been loaded onto tankers since Thursday (12 March), US Treasury Secretary Scott Bessent said on X (formerly Twitter).
Refiners in India, which holds significantly smaller oil inventories than other major Asian oil importers, rushed to book Russian crude after the US temporarily lifted sanctions earlier this month, Reuters reported.
Meanwhile, other Asian refiners are still checking whether they can buy crude, the report said.
Iranian oil will also be relieved
The Trump administration on Friday issued a 30-day sanctions waiver for purchases of Iranian oil already at sea, US Treasury Secretary Scott Bessent said.
The exemption applies to oil loaded on any vessel, including sanctioned tankers, on or before March 20 and released by April 19, according to the Office of Foreign Assets Control.
This is the third time Washington has temporarily lifted sanctions on oil supplies since the start of the war.
Read also | Asian refiners blocked Russian crude early amid shortages in the Middle EastRead also | US now ‘begging’ world and India to buy Russian oil – Iran mocks Trump
Consultancy Energy Aspects estimated on March 19 that around 130 million to 140 million barrels of Iranian crude is currently in the water, equivalent to less than 14 days of current Middle East production losses.
Asia relies on the Middle East for 60% of its oil supplies, and the effective closure of the Strait of Hormuz this month has forced refiners across the region to run at lower rates and cut fuel exports.
Payment process, other complications still a problem
But traders have pointed to some potential complications in buying Iranian oil, including uncertainty over how payment will be processed and the fact that much of the oil is aboard aging shadow fleet ships, Reuters reported.
In addition, some former buyers of Iranian oil were contractually obligated to buy from National Iranian Oil Co., two people with knowledge of the development told the agency. However, since the US reimposed sanctions in late 2018, Iranian oil has largely been sold by third-party traders.
In addition to China, countries such as India, South Korea, Japan, Italy, Greece, Taiwan and Turkey were important buyers of Iranian oil before the reimposition of sanctions.
(with agency inputs)
Key things
- The easing of US sanctions has reopened the option for Indian refiners to buy Iranian crude amid ongoing geopolitical tensions in the Middle East.
- The latest temporary lifting of sanctions on Iranian oil comes shortly after Washington also temporarily lifted sanctions on Russian oil, which is already floating.
- Refiners must deal with complications such as payment processing and an aging fleet of tankers when considering Iranian oil.
