After US sanctions are lifted, refiners in India and other parts of Asia will buy Iranian oil.
Indian refiners are planning to resume purchasing Iranian?oil, while refiners in other parts of Asia are examining the possibility after Washington temporarily lifted sanctions?to 'alleviate a severe energy shortage caused by U.S. and Israeli war against Iran.
Three Indian refinery sources have said that they plan to buy Iranian oil. They are waiting for Washington's clarification on payment terms and government directives.
After the U.S. lifted temporary sanctions, refiners in India, who have much smaller crude stocks than other major Asian oil importers rushed to order Russian oil. Outside office hours, the Indian government was unable to be reached for comment.
According to people familiar with the matter, other Asian refiners have begun checking if they are able to purchase the oil.
Scott Bessent, U.S. Treasury secretary, said that the Trump administration issued a waiver of sanctions for 30 days on Friday to allow Iranian oil at sea to be purchased.
According to the Office of Foreign Assets Control, this waiver applies to oil that is loaded onto any vessel (including sanctioned tanks) on or before March 20, and then discharged on April 19. The U.S. temporarily lifted oil sanctions for the third time since the beginning of the war.
UNLOCKING MILLIONS OF BARRELS OF?OIL
Emmanuel Belostrino is Kpler's senior director for crude oil markets data. He said that about 170 million barrels (or a little more than 170 million gallons) of Iranian?crude were at sea on ships ranging from the Middle East Gulf up to the waters around China.
Consultancy Energy Aspects estimated on March 19, that 130 to 140 millions barrels of Iranian crude oil were floating in the water. This is equivalent to less 14 days' production loss currently experienced by Middle East producers.
The Middle East provides 60% of Asia's crude oil supply. This month, the Strait of Hormuz is almost closed and forcing refineries in the region to reduce their output and decrease fuel exports.
Trump reimposed sanctions on Iran over its nuclear program in 2018. Kpler data shows that China became Iran's biggest client after the sanctions. Its independent refiners bought 1.38 million barrels of crude oil per day last year. They were attracted by the deep discounts, as most countries avoided the 'crude because of the sanctions.
OTHER ISSUES COMPLICATE BUYING
The uncertainty of how to pay and the fact that much of it is on aging ships in the?shadow fleet, said traders, are potential complications when buying Iranian oil.
Two refining sources confirmed that some former buyers of Iranian oil had contractual obligations to purchase from the?National Iranian Oil Co. Since the U.S. reinstated sanctions on Iranian oil in late 2018, a large portion of it has been sold by third-party traders.
A Singapore-based trader stated: "It takes time to get through the compliance, administration, and banking, etc. but I think people will work as quickly as possible."
Sources declined to be identified due to corporate policy.
India, South Korea and Japan were also major buyers of Iranian crude oil before the sanctions were reimposed. Other countries that bought Iranian crude included Greece, Taiwan, Turkey, South Korea, Italy, South Korea and Japan. Reporting by Nidhi verma, Florence Tan, Siyi liu, and Chen Aizhu, in New Delhi; editing by Tony Munroe, Muralikumar Aantharaman.
(source: Reuters)