Two Iranian tankers loaded with crude oil have arrived in India, Bloomberg has reported, in what is the first shipment of Iranian crude to the subcontinent in seven years. The two carry a total of 4 million barrels of oil. The buyers have not been specified, Bloomberg noted.
The shipments were made possible by a U.S. waiver on sanctions against Iran’s oil industry in a bid to alleviate an increasingly worrying shortage in global markets amid the war between the U.S. and Israel, and Iran, which prompted the latter to close off the Strait of Hormuz for all vessels but its own and those of friendly countries.
India, which stopped importing Iranian crude in 2019 to comply with the U.S. sanctions on Tehran’s energy industry, is now scrambling for crude supply as its imports from the other Middle Eastern producers account for about half of all its crude purchases. That supply has been severely constrained over the past weeks due to the closure of the Strait of Hormuz.
Earlier this month, India’s Ministry of Petroleum and Natural Gas said that India imports crude oil from more than 40 countries, “with companies having full flexibility to source oil from different sources & geographies based on commercial considerations.”
China, meanwhile, has been buying Iranian crude unobstructed, it appears, even paying a premium for it. At least two so-called teapot refiners had bought cargoes of Iranian Light at premiums of between $1.50 and $2 per barrel to Brent crude this month, traders told Reuters last week.
Both India and China would face a supply squeeze if the United States goes ahead with its idea to blockade the Gulf of Oman in retaliation for Iran’s blockade of the Strait of Hormuz. This will put additional strain on international relations between the two and the U.S.
By Irina Slav for Oilprice.com
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