INDIAN refiners are planning to resume purchases of Iranian oil, while refiners in other parts of Asia are also reviewing the move after Washington temporarily removed sanctions, traders said on Saturday. The step comes as the US eased restrictions to address an energy crunch linked to the US-Israeli war on Iran.
Three Indian refining sources told Reuters they intend to buy Iranian oil and are waiting for government directions and clarity from Washington on issues such as payment terms.
Refiners in India, which has smaller crude stockpiles than other major Asian importers, had earlier moved to secure Russian oil after the US temporarily lifted sanctions.
Refiners elsewhere in Asia are checking whether they can purchase Iranian oil, people familiar with the matter said.
The Trump administration on Friday issued a 30-day waiver for purchases 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 is the third instance of the US temporarily waiving oil sanctions since the war began.
UNLOCKING MILLIONS OF BARRELS OF OIL
About 170 million barrels of Iranian crude are currently at sea, said Emmanuel Belostrino, senior manager for crude oil market data at Kpler. The oil is on ships spread from the Middle East Gulf to waters near China.
Consultancy Energy Aspects on March 19 estimated 130 million to 140 million barrels of Iranian oil on water, equal to less than 14 days of current Middle East production losses.
Asia depends on the Middle East for 60 per cent of its crude supply. The near-closure of the Strait of Hormuz this month has forced refineries across the region to lower operating rates and reduce fuel exports.
The US re-imposed sanctions on Iran in 2018 over its nuclear programme. Since then, China has been Iran’s main buyer, with independent refiners purchasing 1.38 million barrels per day last year, according to Kpler data. The crude was bought at discounted prices as most countries avoided it due to sanctions.
OTHER ISSUES COMPLICATE BUYING
Traders said there are complications in buying Iranian oil, including uncertainty over payment methods and the fact that a large share of the oil is on ageing shadow fleet vessels.
Some former buyers were also bound by contracts with National Iranian Oil Co., two refining sources said. Since sanctions were re-imposed in late 2018, much of the oil has been sold by third-party traders.
"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 re-imposed, major buyers of Iranian crude included India, South Korea, Japan, Italy, Greece, Taiwan and Turkey.
(With inputs from Reuters)
