Iranian Oil Tanker Arrives Off Gujarat with No Buyers
Unexpected Arrival Amid Sanctions
An Iranian oil tanker reportedly carrying approximately 2 million barrels of crude oil has arrived near Gujarat without any listed destination or buyers. This development comes in the context of the ongoing U.S. blockade of Iranian ports which started on Monday.
The tanker, identified as the very large crude carrier (VLCC) Derya, is believed to have been loaded with Iranian oil on March 28, based on vessel tracking data from the analytics firm Kpler. According to insiders, the vessel’s arrival raises concerns as it likely occurred after a critical cut-off date for purchasing Iranian oil under U.S. sanctions waivers.
Impact of U.S. Sanctions on Oil Purchases
India has previously procured Iranian oil following a temporary sanctions waiver from the U.S., which allowed for the purchase of oil that was already loaded onto tankers before March 20. This waiver expired, and Derya’s cargo is suspected to have been loaded after that date, making Indian refiners hesitant to accept the shipment. Industry sources suggest that this uncertainty could place the tanker in a challenging position for finding buyers elsewhere, with China possibly being its only option.
The U.S. has clarified that it will not renew the sanctions waiver, especially following the military blockade initiated on Monday. This blockade aims to disrupt Iran’s energy exports, primarily targeting its sales to China. Derya is also listed as a U.S.-sanctioned vessel, operated by Iran’s National Iranian Tanker Company (NITC), further complicating potential transactions.
Current Status of the Tanker
As of Wednesday afternoon, Derya has remained stationary close to Gujarat, having shown minimal movement since its arrival. Data from Kpler’s marine intelligence indicates the vessel crossed the Strait of Hormuz before the initiation of the blockade.
Amid heightened tensions in the West Asia region, the U.S. had previously suspended sanctions on Iranian crude loaded on tankers for a month starting March 21 to facilitate an influx of oil into the global market, in a bid to stabilize rising crude oil prices. The waiver mirrors previous concessions made for Russian oil imports as the geopolitical situation escalated.
India’s Energy Imports and Recent Developments
India had not imported Iranian crude since May 2019 due to the reimposition of U.S. sanctions by the Trump administration. However, following the recent sanctions waiver, at least two additional tankers carrying Iranian oil, along with one carrying liquefied petroleum gas (LPG), successfully reached Indian ports, marking a significant moment in Iran-India energy relations.
Recent arrivals include tankers Jaya and Felicity, which brought Iranian oil to Paradip and Sikka ports, respectively, for Indian Oil Corporation (IOC) and Reliance Industries (RIL). The Indian government has confirmed its ongoing purchases of Iranian crude while denying any payment-related issues stemming from the sanctions waiver.
The Ministry of Petroleum has stated that Indian refiners maintain flexibility in oil sourcing and have secured supplies from various countries, including Iran, amid disruptions in Middle Eastern oil supplies. Furthermore, the recent arrival of LPG from Iran at New Mangalore reflects a renewed engagement between India and Iran in energy trade.
Strategic Significance of the Strait of Hormuz
The Strait of Hormuz is critical for global oil transportation, accounting for a significant share of the world’s oil and liquefied natural gas flows. Approximately 2.5 to 2.7 million barrels per day of India’s crude imports have transited through this chokepoint recently, underscoring its importance in India’s energy strategy, as the country meets over 88% of its crude oil requirements through imports.
