West Asia war: India likely looking at Iran oil return as US waives sanctions, but Tehran throws a spanner

Indian refiners are preparing to resume purchases of Iranian crude, while peers across Asia are weighing similar moves after Washington temporarily removed sanctions to ease an energy crunch triggered by the U.S.-Israel war on Iran, Reuters reported on Saturday, citing traders.

According to the report, three sources at Indian refining companies, said they intend to buy Iranian oil, but are awaiting directions from the government as well as clarity from Washington on key aspects such as payment mechanisms.


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The development comes as refiners in India — which maintains relatively smaller crude stockpiles than other major Asian importers — recently rushed to secure supplies of Russian oil after the U.S. temporarily lifted sanctions.

Elsewhere in Asia, several refiners are exploring whether they can also tap Iranian supplies, the report added, citing people familiar with the matter.

The Trump administration on Friday announced a 30-day waiver allowing the sale of Iranian oil already at sea, U.S. Treasury Secretary Scott Bessent said, in a move aimed at easing supply pressures.

The waiver, issued by the Office of Foreign Assets Control, applies to crude loaded on or before March 20 and discharged by April 19, marking the third such temporary relaxation since the conflict began.

The decision could unlock millions of barrels of supply. Around 170 million barrels of Iranian crude are currently at sea on vessels spread from the Middle East to waters near China, according to data from Kpler, while consultancy Energy Aspects estimated 130–140 million barrels on water — equivalent to less than two weeks of current Middle East production losses, the report added.

Also Read: Iran says no floating crude or surplus available, after US eases sanction on Iran crude loaded on vessels as of March 19

Asia, which depends on the region for roughly 60% of its crude imports, has been particularly exposed to the disruption, with the near-closure of the Strait of Hormuz forcing refiners to cut runs and fuel exports.

Before sanctions were reimposed in 2018, major buyers of Iranian crude included India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, while China has since emerged as the primary buyer, drawn by steep discounts.

However, uncertainties remain over payment mechanisms and logistics, the report said, noting that much of the oil is held on ageing “shadow fleet” tankers. Some refiners also face legacy contractual obligations with the National Iranian Oil Company, though a significant portion of Iranian crude has in recent years been sold via third-party intermediaries.

Iran's pushback

Separately, Iran’s Oil Ministry has pushed back against the U.S. move, saying there is little surplus crude available for international markets, according to ANI. In a statement issued via its Mumbai consulate, Tehran said it currently has “no floating crude or surplus” to offer, and suggested Washington’s remarks were aimed at managing market sentiment.

The denial could add to volatility in oil markets already rattled by the conflict, with prices surging as tensions escalate. The U.S. Treasury, however, has maintained that the limited waiver is intended to stabilise global supply by releasing oil already in transit, while continuing broader pressure on Iran.

In a statement issued by Iran's consulate in Mumbai ANI reported that it was said, "At present, Iran essentially has no floating crude or surplus available for international markets. The U.S. Treasury Secretary's remarks appear aimed at reassuring buyers and managing market sentiment."