India’s state-run refiners are in talks with traders marketing Iranian crude, and are preparing to buy barrels if the US extends waivers beyond August or eases restrictions, according to people familiar with the matter.
The companies, however, have little room to buy Iranian oil immediately, having fully contracted shipments required through August after they sought to secure supplies in advance during the Middle East war. Still, refiners may pick up some Iranian cargoes if the discounts are significant, the people said, asking not to be named because the negotiations are private.
The talks are instead aimed at securing access to Iranian barrels should Washington extend the waiver beyond the current Aug. 21 deadline.
Sellers of Iranian oil are finding it harder to attract buyers as prices of unsanctioned Middle Eastern grades have collapsed following the ceasefire that helped restart oil flows through the Strait of Hormuz. Prices of crudes from both within and outside the Persian Gulf have plunged several dollars below underlying benchmarks, narrowing the advantage for Tehran and depriving it of much-needed revenue.
Saudi Arabia underscored the intense competition to find oil buyers in Asia, with the biggest monthly reduction in its official selling prices since at least 2000 this week. Cargoes from Russia, India’s top supplier since 2023, are selling at steeper discounts making Iranian oil even less appealing for refiners in the world’s third-biggest importer.
Crude from Iran is being offered at discounts of $4 to $5 a barrel to Brent, compared with $6 a barrel less for Russia’s Urals oil, the people said. Iran was one of India’s top suppliers, accounting for as much as 10% of its oil imports in 2018, before the sanctions choked flows.
Indian buyers find the Saudi crude unattractive despite the cuts, because of high freight costs, the people said, adding that refiners are more inclined to buy Russian grades, and expect discounts to widen.
Spokespeople for Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. didn’t reply to emails seeking comments.
India’s oil imports from Russia surged to a record 2.7 million barrels a day in June, and are expected to average 2.6 million barrels this month, according to Kpler estimates.
State refiners, including India’s biggest processor Indian Oil Corp., are also not in a position to take advantage of the 60-day sanctions waiver granted by the Trump administration for purchasing Iranian oil as they booked cargoes well ahead of schedule to prepare for supply disruptions during the war, the people said.
Still, Indian refiners are looking to tie up supplies from Iran so that they don’t lose out if purchases are allowed and pricing becomes more competitive.
The government-run processors will start talks with suppliers in coming weeks for September deliveries and may make provisions for Iranian oil with an eye on progress in discussions between Iran and the US for a permanent peace deal, the people said.
Iran’s Petroleum Minister Mohsen Paknejad met with India’s Oil Minister Hardeep Singh Puri during his visit to New Delhi last month for the BRICS Energy Summit, and the two “explored opportunities to cooperate in the energy sector.”