Indian state-held refiners are considering buying Iranian crude oil if the United States extends the waiver on Iran’s oil sales beyond August or further eases restrictions on that trade.
As part of the 14-point memorandum of understanding with Iran, the United States in mid-June authorized the production, delivery, and sale of crude oil, petrochemical products, and refined oil products of Iranian origin through August 21, 2026.
The temporary U.S. waiver has opened the door for Iranian oil sales in the Asian region, but refiners are not really rushing to snap up Iran’s crude, uncertain how much longer these conditions would apply.
India, which has always aimed to steer clear of any controversy with the U.S. over buying Iran’s sanctioned oil, is now tentatively reconsidering a return to buying crude from Tehran.
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Amid talks with companies marketing Iran’s currently de-sanctioned oil, Indian state-owned refiners are preparing to potentially purchase Iranian crude, if the U.S. extends the waiver, anonymous sources with knowledge of the matter told Bloomberg on Tuesday.
The refiners aren’t in a rush to buy Iran’s oil immediately. First, that’s because Indian refiners had hastened to stock up on non-Middle Eastern crude for July and August before the MOU was signed and the Strait of Hormuz was tentatively opened.
Then, the uncertainty over how long the current waiver would last is also preventing India’s state-controlled refiners from flocking to Iranian crude.
Still, if the discounts are too tempting, some Iranian cargoes could make their way to India in the current window until August 21, according to Bloomberg’s sources.
Iran has been pitching its crude to buyers in Asia for weeks, but it appears that there is little appetite for Iranian barrels outside China. That’s also because the prices of Middle Eastern crude from other Gulf producers have crumbled after the MOU amid expectations of a market flooded with Saudi, Iraqi, Kuwaiti, and other crude now that the Strait of Hormuz is operational – to some extent – again.
By Charles Kennedy for Oilprice.com
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