India may soon resume imports of Iranian crude following a temporary sanctions waiver by the United States, but uncertainty over supply availability and geopolitical tensions continues to cloud the outlook.
Amid rising global oil prices triggered by the ongoing tensions involving Iran, the US has allowed the sale of Iranian oil currently stranded at sea. The move, backed by US Treasury Secretary Scott Bessent, aims to stabilize crude prices that have surged past $100 per barrel in recent days.
Indian refiners, already ramping up imports from Russia, are now exploring the possibility of sourcing Iranian oil again. According to reports, at least three Indian companies are awaiting government guidance on procurement and payment mechanisms before proceeding with purchases.
However, optimism has been tempered by statements from Tehran. Officials in Tehran have indicated that there is currently no surplus or floating crude available for export, contradicting US expectations and raising concerns about immediate supply.
The situation is further complicated by disruptions in the Strait of Hormuz, through which nearly 20 percent of the world’s oil supply passes. Iran’s actions in the region have heightened fears of prolonged supply constraints and market volatility.
India, which imports nearly 90 percent of its crude oil needs, has historically relied on Iranian oil due to its compatibility with domestic refineries. Before US sanctions in 2018, Iranian crude accounted for over 11 percent of India’s total imports. Since then, New Delhi has diversified its sourcing, with Russia and Gulf nations becoming key suppliers.
Despite the current uncertainty, analysts believe Indian refiners are well-positioned to reintegrate Iranian oil into their supply chains due to prior experience and established infrastructure.
Meanwhile, India has already taken advantage of a recent US waiver to secure discounted Russian crude, reportedly purchasing around 30 million barrels in a week. Additional shipments are also being rerouted to Indian ports, signaling a strategic effort to maintain energy security amid global disruptions.
While the US waiver is intended to ease pressure on Asian economies, including Japan and Malaysia, Iran’s stance could limit its immediate impact.
As geopolitical tensions persist, the global energy market remains on edge. The coming weeks will be crucial in determining whether India can effectively leverage the waiver to stabilize its oil supply or face continued uncertainty.
India Eyes Return to Iranian Oil After US Waiver, Supply Uncertainty Persists
