Iranian oil heads to India after China detour, ending 7-year import freeze

For the first time in seven years, India is set to receive the first Iranian crude vessel, with Indian Oil Corporation procuring a shipment following US sanctions relief.

In Short

• Tanker Jaya rerouted from China to India's east coast
• Indian Oil Corporation procured Iranian cargo
• US sanctions relief easing payment and supply issues

India is set to receive a shipment of crude oil from Iran this week, with the cargo arriving after a tanker initially headed towards China was rerouted to Indian shores, ending a seven-year hiatus in imports from Tehran after Washington temporarily lifted sanctions on Iranian oil to stabilise strained global supplies.

Shipping data from the London Stock Exchange Group (LSEG) and Kpler show that the Curaao-flagged very large crude carrier Jaya has been chartered to deliver Iranian crude to India’s east coast.

The vessel’s journey suggests a rerouting, having initially moved towards Southeast Asian waters, reportedly with China as a potential destination, before altering course towards India.

The cargo has been procured by Indian Oil Corporation (IOC), which has not yet issued an official response to queries on the development.

In a further indication of renewed flows, another tanker, Jordan, is also signalling India as its discharge point, news agency Reuters reported.

India last imported Iranian oil in May 2019, when US sanctions forced refiners to halt purchases despite Tehran being a key supplier offering favourable terms. Since then, Indian refiners have relied heavily on alternative sources, including West Asian producers and the United States.

The latest development comes against the backdrop of supply disruptions triggered by the conflict in West Asia, which has affected shipments through critical chokepoints such as the Strait of Hormuz. The tightening supply scenario has prompted both policy flexibility in Washington and renewed buying interest among Indian refiners.

Although the shipment is set to arrive after the US and Iran agreed to a ceasefire, the purchase was made earlier this month.

The oil ministry last week confirmed that domestic refiners had begun sourcing crude from Iran amid the evolving situation. It also indicated that payment mechanisms for such transactions are not currently posing a hurdle, suggesting that temporary sanctions relief has enabled smoother trade flows.

Experts view the return of Iranian crude to India’s import basket as a potential relief for refiners grappling with volatile prices and supply uncertainty.

- Ends