Iranian Crude Returns to India After Seven-Year Gap

Iranian crude oil has returned to Indian shores after nearly seven years, with two supertankers docking at key ports on the country’s east and west coasts, according to ship-tracking data.

First Shipments in Seven Years

The very large crude carrier “Felicity,” operated by the National Iranian Tanker Company, anchored off Sikka in Gujarat carrying approximately 2 million barrels of crude oil. The cargo was loaded at Iran’s Kharg Island in mid-March.

Another tanker, “Jaya,” arrived near Paradip port in Odisha around the same time, carrying a similar volume of crude loaded in late February.

US Sanctions Waiver

These shipments were made possible due to a one-month sanctions waiver granted by the United States, allowing the sale of Iranian oil already in transit. The move aimed to ease global supply disruptions and stabilize rising oil prices.

However, the waiver is set to expire on April 19, and recent developments, including a U.S. blockade of Iranian ports, may limit future supplies.

Buyers and Refinery Links

While the buyers of these cargoes have not been officially disclosed, Indian Oil Corporation has confirmed purchasing at least one shipment under the waiver.

Sikka serves as a major crude handling hub for Reliance Industries and Bharat Petroleum Corporation, both of which have refining infrastructure in the region.

Background and Import Trends

India was once a major importer of Iranian crude, purchasing up to 518,000 barrels per day in 2018. Imports declined to 268,000 barrels per day in early 2019 before ceasing entirely in May 2019 due to tightened U.S. sanctions.

At its peak, Iranian crude accounted for 11.5% of India’s total oil imports, with refiners favoring Iran’s light and heavy grades for their compatibility and favorable pricing.

Global Supply Context

An estimated 95 million barrels of Iranian crude are currently stored on vessels at sea. Of this, around 51 million barrels could potentially be sold to India, while the remainder is more suitable for markets in China and Southeast Asia.

Earlier, a tanker carrying 600,000 barrels of Iranian crude diverted to China due to payment issues, highlighting ongoing logistical and financial challenges.

Outlook

The resumption of Iranian crude imports underscores India’s efforts to secure energy supplies amid global uncertainty. However, future imports will depend on geopolitical developments and the continuation of sanctions relief measures.