Iran seeks to diversify its customer base beyond China. Photo credit: AP
Iran has stepped up efforts to attract some of Asia’s biggest oil buyers after a 60-day US sanctions waiver took effect, creating a temporary opening for Tehran to resume exports and clear millions of barrels of oil currently stored at sea, according to a Bloomberg report.The renewed outreach follows the United States’ decision on Monday to authorise Iranian oil sales under a general licence issued by the Treasury Department. The waiver allows the sale of Iranian crude, petroleum products and petrochemicals through August 21 as part of the broader diplomatic push towards a final agreement with Tehran. The US has not meaningfully imported Iranian oil since sanctions were imposed following Iran’s 1979 revolution.Bloomberg reported that sellers, including intermediaries and representatives of the National Iranian Oil Co. (NIOC), began contacting refiners in India, Japan, South Korea and other Asian markets even before the waiver was formally granted. Traders involved in the discussions said the outreach has intensified since the licence came into effect.The move comes as Iran seeks to diversify its customer base beyond China, which has remained the primary buyer of Iranian crude under sanctions. According to data from analytics firm Vortexa and Bloomberg calculations, around 68 million barrels of crude and condensate were on the water as of June 22. Bloomberg reported that at least 80 per cent of those cargoes do not have a clear destination and could potentially be sold to new buyers.Traders told Bloomberg that discussions have also included longer-term supply arrangements as Tehran looks to increase oil production.However, Asian refiners are proceeding cautiously. Most have already secured alternative supplies following months of disruption linked to the Strait of Hormuz and remain wary of uncertainty surrounding US policy, traders said.“Asia 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 modelling at Kpler, told Bloomberg.“Most importantly, refiners in Asia ex-China have already lined up increasing volumes of crude to secure their energy needs,” he added.Ritolia also said Indian refiners had already secured crude arrivals through August.While Indian refiners have generally avoided sanctioned crude, Bloomberg noted that India’s proximity to Iran could make it an attractive destination for prompt deliveries. Some cargoes can reportedly reach Indian processors within two to three days, allowing buyers to take advantage of the temporary waiver period.“The more realistic areas for engagement are LPG, petrochemicals, fertilizers, and broader energy cooperation, but even there I’d be cautious about expecting concrete outcomes given the uncertainty around sanctions relief and Washington’s policy stance,” Ritolia said.Market conditions may also limit Iran’s ability to expand sales. Bloomberg reported that Asia is currently well supplied with crude, reducing incentives for refiners to take on sanctions-related risks unless Iranian cargoes are offered at substantial discounts.“The waiver does open more doors for Iran to sell into Asia, rather than relying almost exclusively on China,” Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, told Bloomberg.“To see more meaningful upside in Iranian oil supply, sanctions relief would need to be more permanent,” he added.
