Indian refiners unlikely to rush for Iranian oil: Experts

Indian refiners are unlikely to significantly increase purchases of Iranian crude despite a temporary easing of US sanctions, as uncertainty over the duration of the waiver, payment constraints, and existing supply commitments limit the scope for new buying, according to a market analyst.

The United States has provided a 60-day sanctions waiver that temporarily allows Iranian crude exports, but the short timeframe is unlikely to trigger a broad return of buyers beyond China, said Sumit Ritolia, who models refinery and oil markets at Kpler.

Indian refiners have already secured much of their crude requirements for the coming months, with procurement plans typically finalised two to three months in advance, Ritolia said. Historically, India was a major buyer of Iranian crude, importing significant volumes of Iranian Light and Heavy grades due to strong refinery compatibility and favourable commercial terms. Following sanctions tightening in 2018, imports ceased from May 2019, with volumes replaced by Middle Eastern, US and other grades. At peak, Iranian crude accounted for 11.5 per cent of India’s total imports.

State-run and private refiners are currently sourcing cargoes for late August and September, with Russian and Middle Eastern grades continuing to dominate purchases. Venezuelan crude has also been gaining market share.

While refiners could make opportunistic purchases if Iranian crude is offered at steep discounts, existing supply availability from Russia and the Middle East reduces the need to alter procurement strategies, he said. “Opportunistic purchases are possible if discounts become highly attractive, but the overall scope appears limited.”
Another deterrent is policy uncertainty. Refiners are unlikely to commit significant volumes while US sanctions