Indian refiners plan to resume buying Iranian oil as US lifts sanctions to ease energy crunch: Report

Indian refiners are planning to resume buying Iranian oil after Washington temporarily relaxed sanctions to ease an energy crunch triggered by the ongoing US-Israeli war on Iran, according to a report by Reuters.

Meanwhile, refiners across other Asian countries are also examining similar moves. The renewed interest comes as the conflict in West Asia disrupted shipping routes, threatening oil flows, and forcing major energy-importing nations to look for alternative supplies.

Livemint could not independently verify the reports.

Indian refining officials said they will purchase Iranian oil and are awaiting further directions from the government and clarification from the United States on details such as payment terms, the agency reported.

US eased sanctions on Russian oil

The latest sanctions waiver on Iranian oil follows a similar move by the Trump administration on Russian crude. Earlier, Washington announced that US penalty on Russian oil would not apply for 30 days on deliveries that had been already loaded on tankers.

American sanctions will not apply for 30 days on deliveries of Russian oil that’s been loaded on tankers as of Thursday (March 12), US Treasury Secretary Scott Bessent said on X (formerly Twitter).

Refiners in India, which maintains significantly smaller crude stockpiles than other major Asian oil importers, rushed to book Russian oil after the US lifted sanctions temporarily earlier this month, Reuters reported.

Meanwhile, other Asian refiners are still making checks to see if they can purchase the oil, the report stated.

Iranian oil also gets relief

The Trump administration on Friday issued a 30-day sanctions waiver for the purchase of Iranian oil already at sea, US Treasury Secretary Scott Bessent said.

The waiver applies to oil loaded on any vessel, including sanctioned tankers, on or before March 20 and discharged by April 19, according to the Office of Foreign Assets Control.

This marks the third time Washington has temporarily waived sanctions on oil shipments since the beginning of the war.

Consultancy Energy Aspects estimated on March 19 that approximately 130 million to 140 million barrels of Iranian oil is currently on water, which is equivalent to less than 14 days of current Middle East production losses.

Asia relies on the Middle East for 60% of its crude supply and the effective closure of the Strait of Hormuz this month has forced refineries across the region to run at lower rates and slash fuel exports.

Payment process, other complications still an issue

However, traders flagged some potential complications for buying Iranian oil, which include uncertainty over how to process the payment and the fact that a large share of oil is aboard aging shadow fleet ships, Reuters said.

Additionally, some former buyers of Iranian oil were contractually obligated to buy from National Iranian Oil Co., two people aware of the developments told the agency. However, since the US re-imposed sanctions in late 2018, Iranian oil has been sold in major parts by third-party traders.

Apart from China, some major buyers of Iranian crude oil before the sanctions were re-imposed include nations such as India, South Korea, Japan, Italy, Greece, Taiwan and Turkey.

(with agency inputs)