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Sources say that Iranian oil is being offered at a premium to Brent to India

Three industry sources reported that traders?offered Iranian oil at a premium over ICE Brent to Indian refiners after Washington temporarily removed sanctions in order to ease the energy shortage caused by the U.S. and Israeli war against Iran.

India, which is the third largest oil consumer and importer in the world, hasn't received a shipment from Tehran since May 2019, after being pressured by the United States to stop buying Iranian crude.

India is 'hit hard' by the disruption of energy shipping via the Strait of Hormuz due to the war against Iran. The conflict has now entered its fourth week. The sources say that India's refiners only have one month to maximize their purchases of oil and LPG from Iran, which is located geographically near India. Indian refiners bought millions of barrels after the U.S. lifted its sanctions on Russia to try and curb the rise in oil prices.

India is also suffering from a severe shortage of LPG (primarily used in cooking).

Payments in Dollars or even Rupees

The sources stated that traders and the National Iranian Oil Co. are looking for payments in dollars. Some parties will even accept payment in Indian rupees.

Sources could not be identified because they weren't authorised to talk to the media. Fatih Birol said that the current energy crisis was worse than both oil shocks in the 1970s combined.

Scott Bessent, U.S. Treasury secretary, said that the Trump administration issued a waiver of sanctions for 30 days on Friday to allow purchase of Iranian oil at sea.

According to the Office of Foreign Assets Control, this waiver is applicable to oil loaded onto a vessel (including tankers subject to sanctions) on or before 20 March and discharged on 19 April.

According to sources, Iranian oil was offered at a $6-$8 premium per barrel over the ICE Brent. Payment would be made within seven days after cargo arrival.

They added that Indian refiners wanted to make sure of the payment system before they signed any 'deal' with NIOC, as Iran has been cut off from the SWIFT payments system.

Sujata Sharma, joint secretary of the federal oil ministry told reporters that any decision by oil companies to purchase Iranian fuel was "a technological-commercial decision".

(source: Reuters)