Kamal Ghorui
With the US waiving sanctions on Iran oil, Reliance Industries has reportedly bought 5 million barrels of Iranian crude. Reliance runs the world’s largest refining complex. The effective closure of the Strait of Hormuz has led to global crude oil prices shooting up. In recent years, Iranian crude has largely been purchased by independent refiners in China and is often rebranded as originating from other countries.Last Friday, the Donald Trump administration granted a 30-day waiver on sanctions for Iranian oil already in transit. The exemption covers cargo loaded on or before March 20, including shipments on sanctioned vessels, provided it is discharged by April 19.
Reliance buys Iran crude oil
Two sources told Reuters that the cargo was sourced from the National Iranian Oil Company. One of them noted that the crude was priced at a premium of about $7 per barrel over ICE Brent futures. The delivery schedule is not yet known.The transaction marks India’s first import of Iranian oil since May 2019, when the country, the world’s third-largest importer and consumer of crude, stopped purchases following the reimposition of US sanctions on Tehran.The move follows large-scale buying of Russian crude by Indian refiners, who secured more than 40 million barrels to deal with supply crunch from the Middle East.Other Asian refiners, including Indian state-run firms, are evaluating whether to buy Iranian oil, sources said.
State refiners hesitant?
At the same time, a Bloomberg report indicates that state-run refiners are reluctant to procure Iranian crude, as apprehensions around operational, financial and regulatory hurdles could outweigh any short-term benefits.Despite the sanctions waiver granted by the administration of Donald Trump, these refiners have remained cautious. Persistent uncertainties linked to shipping, insurance and payment mechanisms have so far prevented deals from being finalised.The brief duration of the waiver is a major concern. Refiners worry that any delays in execution could push shipments beyond the allowed timeframe, potentially exposing them to the risk of sanctions.
