India eyes return to Iranian oil after US waiver amid global supply crunch

India has kept most fuel prices unchanged despite a sharp rise in global crude costs, even as refiners consider resuming purchases of Iranian oil following a temporary US sanctions waiver. 

Indian Oil Corp Ltd said its latest price adjustment applies only to its premium petrol grade XP-95, limiting the impact on overall consumption. The move follows a steep jump in global crude prices from USD 71 to USD 156 per barrel within 20 days.

Authorities confirmed that regular petrol and diesel prices have not been increased nationwide. However, industrial diesel prices have risen by 25 per cent, from Rs 87.67 per litre to Rs 109.59 per litre.

Officials also reported easing pressure in the domestic market. LPG bookings dropped to 55 lakh on Thursday, indicating that panic buying has subsided. The government said supplies remain adequate, with no fuel outlets running dry, though it acknowledged that LPG availability remains a concern.

A shift in consumer behaviour is underway, with 7.5 lakh users moving from LPG to piped natural gas. Monitoring has been tightened, with control rooms and district committees set up across 32 states and union territories. Enforcement action has intensified, including 4,500 raids nationwide and 1,800 surprise inspections by oil marketing companies.

Logistical support has also been introduced, including temporary relief on port charges for crude and LPG shipments at New Mangalore port between March 14 and 31.

Refiners await clarity on Iranian oil purchases

Separately, a Reuters report said Indian refiners are preparing to resume buying Iranian crude after Washington temporarily eased sanctions to address an energy crunch linked to the US-Israeli conflict with Iran.

Three refining sources indicated they are ready to proceed but are waiting for government guidance and clarity from the US on payment mechanisms. India had earlier increased purchases of Russian oil after recent sanctions relief.

The US has issued a 30-day waiver covering Iranian oil already at sea, applicable to cargo loaded on or before March 20 and discharged by April 19. This is the third such waiver since the conflict began.

Estimates suggest between 130 million and 170 million barrels of Iranian crude are currently floating at sea. However, challenges remain, including payment uncertainties and reliance on older vessels in the so-called shadow fleet.

Asian refiners are also reviewing potential purchases, as the region—dependent on the Middle East for 60 per cent of its crude—faces supply strain and reduced refinery operations.