Indian refiners offered discounted Iranian oil after US sanctions waiver

NEW DELHI: Indian refiners have been offered discounted Iranian crude after the United States issued a 60-day temporary sanctions waiver for Tehran, according to Indian refining sources.

The waiver was granted on Monday after initial talks under an emerging peace arrangement, creating a limited window for energy trade with Iran.

According to the sources, offers have come directly from the National Iranian Oil Co and through intermediaries claiming to have allocations from the Iranian state producer.

NIOC has told Indian buyers that Iranian crude would be $3 to $4 per barrel cheaper than similar regional grades on a landed-cost basis.

The intermediaries approaching Indian refiners are mostly small and mid-sized trading firms based in Singapore and Dubai, the sources said.

Potential crude and liquefied petroleum gas supplies to India were also discussed during Iranian Petroleum Minister Mohsen Paknejad’s visit to New Delhi this week.

However, Indian refiners have limited room to take Iranian crude in the near term as most have already secured supplies through August. Middle Eastern term suppliers are also pressing buyers to meet annual contractual commitments.

Payment and banking arrangements remain another hurdle, with sources saying commercial negotiations could take time.

India has already imported Iranian LPG through traders, and those flows could increase during the sanctions waiver period.

India also received two Iranian oil cargoes in April after Washington granted a 30-day sanctions waiver. Payments for those cargoes were settled in Chinese yuan.

Iran was India’s second-largest oil supplier in financial year 2010-11, before United States sanctions forced New Delhi to cut purchases and eventually halt crude imports from Tehran in May 2019.