Will India get access to Iran crude oil after over 6 years? Amid the raging Middle-East conflict and rising oil prices, the Donald Trump administration has announced a temporary relaxation of sanctions on Iranian oil. This waiver is for crude oil that has already been loaded onto vessels.According to a Treasury statement, the exemption permits the delivery and sale of Iranian crude and other petroleum products that were loaded onto ships before March 20. This authorization will remain in effect until April 19.
The decision, issued by the Office of Foreign Assets Control and previously indicated as under review by Treasury Secretary Scott Bessent on Thursday, comes after a similar step to ease restrictions on Russian oil shipments already at sea.
Iran oil sanctions waiver: What does it mean for India?
India has not imported crude oil from Iran since mid-2019, after the United States withdrew sanctions waivers that had previously allowed such purchases. A significant portion of India’s oil requirements, roughly 35–40 per cent, is typically met through shipments routed via the Strait of Hormuz. However, the effective closure of this key passage following the outbreak of the US-Iran conflict has disrupted supplies, even as India continues efforts to secure safe transit for its tankers.Also Read | LPG crisis: India turns to US to secure supplies as Strait of Hormuz disruptions continue to bite; shipments riseTo cushion the impact of potential supply disruptions, India has sharply increased its purchases of Russian crude in recent weeks. A Bloomberg report noted that the country acquired about 30 million barrels of Russian oil within a week of the conflict escalating.In this context, any move by the US to ease restrictions on Iranian oil already at sea could enable India to ramp up procurement, thereby adding another crucial source to its crude import mix.Sumit Ritolia, Lead Research Analyst for Refining and Modelling at Kpler, pointed out that India has historically been a major importer of Iranian crude, particularly Iranian Light and Heavy grades, owing to their compatibility with domestic refineries and favourable commercial terms.According to Ritolia, India could once again become an important centre of demand, alongside Chinese buyers, as well as other Asian markets.
India annual imports from Iran
After sanctions were tightened in 2018, India halted crude imports from Iran starting May 2019, replacing those volumes with supplies from the Middle East, the US and other sources. At its peak, Iranian oil had made up about 11.5 per cent of India’s total imports, according to Kpler data.Similar to the availability of Russian crude currently at sea, Iranian oil supply remains considerable. Ritolia notes that Indian refiners are well-positioned to bring these supplies back into their systems with minimal operational changes, given their prior experience in processing Iranian grades and existing trading arrangements.
Why has the US waived sanctions is Iran oil really available?
The backdrop to the move is Iran’s effective blockade of the Strait of Hormuz – a critical route that typically handles about 20 per cent of global oil and gas flows – along with repeated strikes on energy infrastructure across the Middle East, both of which have driven crude prices sharply higher.In a statement on Friday, Bessent described the measure as a limited and short-term step aligned with Trump’s objective to boost global energy availability and maintain stability in the markets.“At the moment, discounted Iranian oil under sanctions is largely being stockpiled by China,” Treasury Secretary Scott Bessent said in a statement.He added that allowing this already-loaded oil to enter global markets on a temporary basis could release nearly 140 million barrels, increasing overall energy availability and easing short-term supply constraints linked to Iran.Also Read | How Iran’s strikes on Qatar’s Ras Laffan, world’s largest LNG hub & other Middle East oil & gas infra, will impact IndiaHowever, Iran has pushed back against the US claim, asserting that it does not have excess crude available for export. “Currently, Iran has virtually no surplus oil either at sea or ready for international supply, and the US treasury secretary’s remarks are merely intended to reassure buyers,” Iranian oil ministry spokesperson Saman Ghoddoosi said in a post on X.The Treasury clarified that the latest authorization excludes shipments destined for Cuba, North Korea, and Russian-occupied regions of Ukraine.Oil prices closed higher on Friday, though they stayed below the $120 per barrel mark, a level that has been tested several times since the conflict began three weeks ago.North Sea Brent crude rose 3.26 per cent to settle at $112.19 per barrel, while US benchmark West Texas Intermediate (WTI), typically priced lower, climbed 2.27 per cent to $98.32 per barrel.
