US Grants Temporary Waiver on Iran Oil Sanctions; Tehran Courts Indian Refiners
The National Iranian Oil Company (NIOC) has initiated contact with international oil companies, including Indian refiners, and trading houses to resume commercial ties and restart global oil exports, according to trade sources.
This development follows the signing of a memorandum of understanding (MoU) between the United States and Iran, with initial talks under the pact showing progress. The MoU, signed last week, stipulates that the US will issue sanctions waivers for Iranian crude and petroleum products, eventually terminating sanctions on Iranian oil trade. On Monday evening (India time), the US Department of the Treasury issued a temporary 60-day waiver, allowing production, delivery, and sale of Iranian oil, petroleum products, and petrochemicals until August 21. The US has also committed to removing its naval blockade of Iranian ports. These measures are expected to enable NIOC to expand its oil exports beyond China, which has been the primary destination in recent years.
Indian refiners have received communication from NIOC. A senior refinery executive, speaking on condition of anonymity, said trading teams are in touch with the Iranian side and are evaluating the techno-commercial feasibility of lifting Iranian crude under the terms of the US-Iran MoU. India, which stopped purchasing Iranian oil in 2019 after the US reimposed sanctions, had briefly resumed imports in April this year when a month-long waiver was granted amid the West Asia conflict and the closure of the Strait of Hormuz. Data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) shows India imported about 530,000 tonnes of Iranian oil in April. However, imports ceased after the waiver lapsed, as Indian refiners avoid dealings under US sanctions to prevent secondary sanctions.
Refiners are conducting thorough assessments, considering technical compatibility with refineries, pricing, payment mechanisms, insurance, and logistics. While the US waiver covers Iran's oil, petroleum product, and petrochemical exports, it does not lift financial sector sanctions. However, the waiver notification allows payments in dollar-denominated funds, which could alleviate some payment challenges. Industry analysts note that Indian refiners will base their decisions on the scope and durability of sanctions relief, pricing, and availability of payment and logistics mechanisms.
