Indian refiners are settling payments for rare cargoes of Iranian oil purchased under a temporary US sanctions waiver in Chinese Yuan through Mumbai-based ICICI Bank.
Reuters reported this update last Friday (17th April), citing four sources familiar with the matter.
Last month, United States unveiled 30-day waivers on sanctions for the purchase of Russian and Iranian oil at sea in an attempt to ease prices driven up by the US-Israel war on Iran. Treasury Secretary Scott Bessent said on Wednesday that Washington would not renew the waivers, with the exemption on Iranian oil set to lapse on Sunday.
Difficulties in arranging payments for such cargoes, given longstanding sanctions on Iran, have deterred some potential buyers of Iranian crude under the waiver, traders said.
Earlier this month, state-run Indian Oil Corporation, the country’s largest refiner, bought 2 million barrels of Iranian oil onboard the very large crude carrier Jaya in India’s first purchase of Iranian crude in seven years, according to Reuters. The cargo was worth roughly $200 million.
India has also allowed four vessels carrying Iranian oil to berth for privately run Reliance Industries, sources said last week. One vessel, the MT Felicity, has discharged so far, according to LSEG data and a shipping source.
Both refiners are settling the trade through ICICI, which is routing funds in Yuan via its Shanghai branch to seller accounts denominated in the Chinese currency. The identity of the sellers could not be determined.
ICICI, Indian Oil Corporation, Reliance Industries and India’s foreign ministry did not respond to emails seeking comment. Details on how the cargoes are being paid for had not been previously reported.
IOC paid about 95 percent of the cargo’s value against the supplier’s notice of readiness, which indicates that the loaded tanker had entered Indian waters, two sources said, adding that this was an unusual arrangement.
Typically, Indian state-owned refiners settle payments upon delivery or discharge for oil from countries sanctioned by Western nations. India has been among the top buyers of Russian oil since Russian invasion of Ukraine triggered widespread Western sanctions on Russia.
The sources declined to be named as they were not authorized to speak to the media.
Indian refiners have also used China’s currency to settle some of their Russian oil purchases. One source said IOC does not plan further Iranian oil purchases.
Until the US waiver, India had avoided buying Iranian oil since 2019 under pressure from American sanctions. Chinese independent refiners, known as teapots, have been the main buyers of Iranian oil exports since then.
Bd-Pratidin English/ AM
