Iran is moving quickly to reconnect with some of Asia’s largest oil consumers, including India, after the United States granted a 60-day sanctions waiver, opening a narrow window for Tehran to resume exports beyond its primary customer, China. According to Bloomberg, Iranian sellers, middlemen, and representatives of the National Iranian Oil Company began reaching out to refiners in India, Japan, South Korea, and other Asian markets even before the waiver was officially announced, reflecting Tehran’s urgency to restart trade and clear a growing stockpile of crude.
At the heart of Iran’s push is a massive volume of oil already floating at sea. Bloomberg, citing data from analytics firm Vortexa, reported that around 68 million barrels of Iranian crude and condensate were on tankers as of June 22. More than 80% of that volume reportedly has no clear destination, making it immediately available for potential buyers. With many of these cargoes already in regional waters, India is among the countries best positioned to take delivery quickly.
The question, however, is whether India is ready to buy Iranian oil?
For years, India was one of Iran’s biggest oil customers before US sanctions forced refiners to halt purchases. While the new waiver theoretically allows trade to resume, Indian refiners are showing little urgency and may also not be willing to buy Iranian oil.
Bloomberg reported that most Asian buyers have already secured alternative crude supplies after months of uncertainty surrounding shipping routes through the Strait of Hormuz. Industry participants told Bloomberg that Indian refiners have largely covered their crude requirements through August, reducing the immediate need for Iranian oil.
There are also concerns that the waiver might prove temporary. US policy toward Iran has shifted repeatedly in recent years, leaving buyers wary of entering into long-term agreements that could once again become subject to sanctions. In addition, European and British restrictions remain in force, creating complications for insurance, financing, and shipping. Many ports also remain reluctant to handle vessels associated with the “dark fleet” that has transported Iranian oil under sanctions.
“The Asia market is unlikely to commit to Iranian crude imports while US policy on sanctions continues to flip-flop and the geopolitical situation remains highly fluid,” Sumit Ritolia, Lead Analyst for Refining Supply and Modeling at Kpler, told Bloomberg. He noted that refiners across Asia, particularly outside China, have already secured additional crude supplies to ensure energy security.
India occupies a unique position in Tehran’s calculations to sell oil. Indian refiners have traditionally avoided sanctioned crude, but geography could work in Iran’s favour, and it can also help Indian refiners have the negotiating cards.
According to the Bloomberg report, some Iranian cargoes can reach Indian ports within just two to three days, making India one of the quickest destinations for the millions of barrels currently floating at sea.
With Tehran eager to clear cargoes before the US waiver expires, Indian buyers could potentially leverage that urgency to negotiate steep discounts.
Yet it seems like proximity alone may not be enough to revive trade between India and Iran. The Middle Eastern benchmark grades, such as Dubai and Murban (a premium, light, and sweet crude oil produced in Abu Dhabi), are already trading in a contango structure, where prompt deliveries are cheaper than future cargoes, indicating there is no immediate shortage of crude in Asia, Bloomberg reported.
Analysts believe the opportunities for engagement between Tehran and New Delhi may extend beyond crude oil. Sumit Ritolia, Lead Analyst for Refining Supply and Modeling at Kpler, told Bloomberg that sectors such as liquefied petroleum gas (LPG), petrochemicals, fertilisers, and broader energy cooperation may offer more realistic avenues for India-Iran engagement. Even those prospects, however, remain dependent on the durability of sanctions relief and Washington’s future policy toward Tehran.
Independent analysts suggest Iran could rapidly increase production if the current easing of restrictions proves sustainable.
Faisal Alshammeri, an independent political analyst, told Russian state-owned news agency Sputnik that Iran could restore as much as 1.6 million barrels per day of output within four to eight weeks following Iranian Foreign Minister Abbas Araghchi’s announcement that restrictions on Iranian oil and petrochemical exports had been lifted.
Energy economist Kazi Sohag of Saint Petersburg University similarly said a significant increase in Iranian production could occur as early as July.
However, both analysts cautioned that lifting export restrictions is only the first hurdle. Banking restrictions, insurance and shipping challenges, security concerns along key maritime routes, and uncertainty surrounding the durability of the US-Iran political understanding could all complicate a sustained revival of Iranian exports.
They also expect any recovery in Iranian oil sales to occur in phases.
China, already Tehran’s largest customer, is likely to remain the first and biggest buyer of additional Iranian crude. India could emerge as part of a second wave of purchasers, particularly if sanctions relief proves durable and refiners are offered attractive commercial terms. Turkey may also return relatively early, while South Korea, Japan, and eventually European countries could follow if legal and financial restrictions ease further.
That outlook mirrors the cautious approach currently being adopted by Indian refiners. While Iran’s proximity and the availability of cargoes make it an attractive option on paper, buyers remain wary of committing to purchases until there is greater clarity on sanctions, financing and the broader geopolitical environment. For Tehran, reopening the door to India might be relatively straightforward. Convincing Indian refiners to walk through it could take considerably longer and might happen in the second wave of sales.