NEW DELHI/SINGAPORE, March 21 — Indian refiners plan to resume buying Iranian oil while refiners elsewhere in Asia are examining such a move after Washington temporarily removed sanctions to alleviate an energy crunch caused by the United States (US)-Israeli war on Iran, traders said on Saturday.
Three Indian refiners said they will buy Iranian oil and are awaiting government guidance and clarity from Washington on details such as payment terms.
Refiners in India, which have much smaller crude stockpiles than other major Asian oil importers, rushed to book Russian oil after the US recently temporarily lifted sanctions. The Indian government could not be immediately reached for comment outside office hours.
Several people familiar with the matter said that other Asian refiners are conducting checks to see whether they can purchase the oil.
On Friday, US Treasury Secretary Scott Bessent said that the Trump administration has issued a 30-day sanctions waiver for the purchase of Iranian oil already at sea.
According to the Office of Foreign Assets Control, the waiver applies to oil loaded on any vessel, including sanctioned tankers, on or before March 20 and discharged by April 19. It is the third time the US has temporarily waived sanctions on oil since the start of the war.
Unlocking millions of barrels of oil
Kpler’s senior manager for crude oil market data Emmanuel Belostrino said that an estimated 170 million barrels of Iranian crude are at sea, on ships scattered from the Middle East Gulf to the waters near China.
On March 19, Consultancy Energy Aspects estimated 130 million to 140 million barrels of Iranian oil on water, equivalent to less than 14 days of current Middle East production losses.
Asia relies on the Middle East for 60 per cent of its crude supply,and the near-closure of the Strait of Hormuz this month is forcing refineries across the region to run at lower rates and cut fuel exports.
Trump re-imposed sanctions on Iran in 2018 over its nuclear programme. Since then, China has become Iran's main client with its independent refiners buying 1.38 million barrels per day (bpd) last year, Kpler data showed, attracted by deep discounts as most countries shunned the crude due to the sanctions.
Other issues complicate buying
Traders have noted the potential complications for buying Iranian oil include uncertainty over how to pay for it and the fact that a large share of it is aboard ageing shadow fleet ships.
Similarly, two refining sources said that some former purchasers of Iranian oil were contractually obligated to buy from the National Iranian Oil Co. However, since the US re-imposed sanctions in late 2018, Iranian oil has been sold in significant part 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.
Other than China, major buyers of Iranian crude before sanctions were re-imposed included India, South Korea, Japan, Italy, Greece, Taiwan, and Turkiye.
