India to Potentially Reinitiate Crude Oil Imports from Iran after 7-Year Suspension

US Sanctions: Indian Oil Import from Iran May Resume

An oil tanker, the Ping Shun, placed under US sanctions in 2025, is currently signalling a destination in India, potentially marking the first such import in nearly seven years. According to Bloomberg, the Aframax vessel constructed in 2002 began transmitting signals on Monday, indicating it will arrive at India's western port of Vadinar later this week. Tracking data from firms such as Kpler and Vortexa reveal the tanker loaded its cargo at Kharg Island in early March. However, the ship's final destination remains subject to change.

If the delivery is successful, it would represent India's first acquisition of Iranian oil since May 2019, when imports ceased due to US pressure. This shipment arrives as India grapples with surging energy costs following the functional closure of the Strait of Hormuz, a result of the US-Israeli conflict with Iran disrupting Middle Eastern fuel flows.

The Ministry of Ports, Shipping and Waterways said it did not know of any such development. Mukesh Mangal, additional secretary at the Shipping Ministry, stated that the government had "no specific information" on the vessel. This remark was made during an inter-ministerial briefing on the recent developments in West Asia.

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The US recently issued temporary waivers for Iranian crude already onboard tankers to stabilise the market. However, Indian state-backed entities have largely avoided these purchases due to complex hurdles involving payments, shipping logistics, and insurance. The Ping Shun's transparent signalling toward Vadinar may suggest that buyers are successfully navigating these obstacles.

However, such transactions remain difficult. A recent attempt to sell Iranian liquefied petroleum gas to India highlights these challenges; the vessel Sea Bird reached Mangalore on 30 March but has not yet unloaded. The receiver is not ready for delivery as payment arrangements are still being finalized.

Furthermore, even with waivers, several intermediary banks in Asia refuse to process US dollar transactions for Iranian oil, fearing prohibited dealings with sanctioned entities, as per the Bloomberg report. Before adjusting its course for Vadinar, the tanker was originally indicating a Chinese destination. This would be the Ping Shun's inaugural delivery to an Indian port.

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The port at Vadinar serves major Indian refiners, including Indian Oil Corp., Bharat Petroleum Corp., and the Rosneft-backed Nayara Energy. Notably, Nayara is scheduled to pause operations for a month for maintenance this April, which would temporarily remove its requirement for crude imports.