In the wake of the Trump administration’s temporary waiver on sanctions related to Iranian crude, Indian refineries are reportedly planning to buy oil from Tehran.
The development came to light in a report by Reuters on Saturday (March 21). The report, quoting three sources in the Indian refining sector, further stated that these refineries were ready to buy Iranian oil and were waiting for instructions from the government and clarification from the US on issues such as the terms of payment.
Indian refineries, with a stockpile of crude smaller than that of major refineries in Asia, rushed to buy Russian oil following the US’ move to temporarily lift sanctions on Moscow’s crude.
As for other Asian refineries, they are currently looking into whether they can purchase Iranian crude, stated the report.
Waiver terms outlined
The Trump administration on Friday granted a 30-day waiver on sanctions covering purchases of Iranian oil already in transit, US Treasury Secretary Scott Bessent said.
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The exemption applies to crude loaded onto any vessel, including those under sanctions, on or before March 20 and discharged by April 19, the Office of Foreign Assets Control said. It marks the third instance of Washington easing restrictions on oil flows since the war began.
Crude volumes at sea
Roughly 170 million barrels of Iranian crude are currently at sea, according to Emmanuel Belostrino, senior manager of data and analytics firm Kpler for crude oil market data, with cargoes spread from the Middle East Gulf to waters off China.
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Consultancy Energy Aspects on March 19 placed the volume between 130 million and 140 million barrels, estimating it at less than two weeks of current Middle East supply disruptions.
Asia depends on the Middle East for about 60 per cent of its crude imports, and the near-closure of the Strait of Hormuz this month has pushed refiners across the region to scale back operations and trim fuel exports.
China’s buying dominance
Trump reimposed sanctions on Iran in 2018 over its nuclear programme. Since then, China has emerged as the country’s primary buyer, with independent refiners importing 1.38 million barrels per day last year, according to Kpler data, drawn by steep discounts as most other countries avoided the oil.
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However, traders said potential hurdles remain, including uncertainty around payment mechanisms and the condition of vessels carrying the crude, many of which belong to an ageing shadow fleet.
Trade and payment hurdles
According to the report, some previous buyers are also tied to contracts with National Iranian Oil Co., two refining sources said. However, since sanctions were reinstated in late 2018, a significant share of Iranian oil has been marketed through third-party traders.
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“It usually takes some time to work through compliance, administration and banking, etc., but I guess people will try to work ASAP,” a Singapore-based trader said.
The sources declined to be named due to company policy.
Before sanctions were reinstated, major importers of Iranian crude included India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, in addition to China.
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