- US may allow Iranian oil already at sea to reach buyers
- Around 140–170 million barrels could enter global markets
- India could gain access to discounted crude again
- Sanctions on shipping, insurance, and payments remain a challenge
- China may face more competition for Iranian oil supplies
A possible policy shift by the United States on Iranian oil exports could bring short-term relief to global energy markets and create new opportunities for India, one of the world’s largest oil importers.
US Treasury Secretary Scott Bessent recently said that Washington is considering easing restrictions on Iranian oil shipments that are already at sea. This move could release a large volume of crude oil into the global market at a time when supplies are tight due to ongoing conflicts affecting production and shipping routes.
Estimates suggest that between 140 million and 170 million barrels of Iranian oil are currently on ships, either moving slowly or sitting in floating storage. If even part of this oil becomes available, it could help stabilize prices, at least for a short period of 10 to 14 days.
For India, this development is especially important. The country imports nearly 90 per cent of the oil it consumes, making it highly vulnerable to global supply disruptions. More than 60 per cent of its crude oil comes from Gulf countries such as Iraq, Saudi Arabia, Kuwait, and the United Arab Emirates.
A major concern right now is the Strait of Hormuz, a key route through which about half of India’s oil imports pass. Ongoing conflict has disrupted this route, adding pressure to supply chains.
In the past, India was a significant buyer of Iranian oil. Before sanctions tightened in 2018, Iran supplied about 11.5% of India’s total crude imports. Iranian oil was popular because it matched well with Indian refineries and was often sold at favorable prices with flexible payment terms.
However, imports stopped in 2019 after stricter US sanctions. India then shifted to other suppliers, including the US and Middle Eastern countries. Later, after the Russia-Ukraine War began, India increased purchases of discounted Russian oil.
Experts believe a similar trend could happen again if Iranian oil becomes available. Indian refiners already have experience processing Iranian crude, so they could quickly restart purchases without major changes.
Still, there are challenges. Sanctions not only limit oil sales, but they also affect shipping, insurance, and payment systems. Without clear rules or easing in these areas, it will remain difficult for companies to complete transactions safely.
Another factor is competition. Right now, China is the main buyer of Iranian oil. If the US allows broader access, other Asian countries like India, Japan, and Malaysia may also enter the market. This could force Chinese buyers to pay closer to market prices.
The proposal also faces uncertainty in Washington. While Donald Trump has said the government will act to control oil prices, he has not clearly supported the idea. At the same time, lawmakers in the US House of Representatives are pushing for stricter sanctions on Iran’s oil sector.
In recent weeks, the US has already taken steps to increase supply, including releasing oil from reserves and easing some restrictions on Russian exports.
Overall, while the situation is still unclear, even a limited easing of Iranian oil restrictions could provide short-term relief to global markets. For India, it could mean access to cheaper oil and improved energy security, if political and logistical barriers are resolved.
