A temporary US sanctions waiver on Iranian oil sales is unlikely to draw orders
from well-stocked Asian refiners, leaving independent Chinese
refineries as the main buyer, trade sources and analysts said.
The US authorised on Monday the sale of crude, petroleum
products and petrochemicals of Iranian origin through August 21,
easing decades-old sanctions as it pushes toward a final peace
deal with Tehran.
Hit by supply disruptions due to the blockade of the Strait
of Hormuz since March, Asian refiners have been aggressively
buying oil from the U.S., Russia, Africa and Latin America.
But the US-Iran interim peace deal is reopening the strait
and allowing oil stranded for months to exit, weighing on global
oil markets. Middle Eastern producers are also now pressuring
buyers to lift contracted volumes under annual deals, sources
said.
The National Iranian Oil Co has sought proposals from Asian
refiners for the purchase of its oil, one of the sources said.
An industry source close to NIOC said it is calculating
delivered prices of rival crudes to China for possible spot
sales. Another source said Iranian oil sellers have temporarily
halted offering cargoes to China’s eastern Shandong province as
they assess demand from other countries.
“Most oil companies are covered till August. We were not
expecting a waiver and had already bought whatever was available
in the market,” said a source at an Indian refiner. “In fact, we
booked some crude cargoes for August at a premium.”
Sumit Ritolia, lead analyst at ship-tracking firm Kpler,
said: “With India’s crude supplies comfortable until August, the
biggest beneficiary of any sanctions waiver on Iranian oil would
likely be China, which needs crude for both processing and
strategic stock replenishment.”
Three Asian refiners, which last bought Iranian oil nearly a
decade ago, said they have bought enough crude for now while
non-sanctioned supplies have become affordable.
And besides compliance challenges, the timing is too tight
and Japanese refiners will need to conduct trial runs before
resuming purchases, Japanese oil sources said.
IRAN RAMPS UP EXPORTS
Buyers are also cautious due to uncertainty over the
sanctions relief, Washington’s policy stance and challenges in
dealing with banking and payment issues, the sources and
analysts said.
“Iran will take this opportunity to ship as many cargoes out
of the Gulf as possible,” ship-tracking firm Vortexa said,
adding that Iranian crude on water has increased by 6 million
barrels over the past 48 hours.
Vortexa data showed that Iranian crude on water currently
stands at 126 million barrels, with about half already in Asia –
floating in the South China Sea or the Yellow Sea – and the
other half likely moving in that direction too.
Iran’s biggest customer – Chinese independent refiners, or
teapots – will likely remain as the ultimate buyer, even though
their appetite is currently weak due to output cuts since May,
Vortexa said.
GLOBAL PRICES UNDER PRESSURE
The return of Iranian crude is pressuring global oil prices,
with Brent crude declining by about 16% so far in June.
Sources expect supply of Iranian oil will potentially widen
discounts on Russian grades and push other Gulf producers such
as Saudi Arabia to lower official selling prices to regain
market share.
Still, there are deterrents for companies looking to resume
Iranian oil imports, sources say.
In India, refiners are unwilling to commit to purchases
unless U.S. sanctions relief is assured beyond August.
“We can start discussions and negotiations with Iranian
suppliers, but any commitment will depend on continuity of the
sanctions waiver,” the first source said.
For fuel oil, the sanctions relief will exert further
downward pressure on the market, particularly for the
high-sulphur grade even though traders expect just a tiny uptick
in Iranian fuel and bunker trade as banking and payment systems
remain a stumbling block.
Published on June 23, 2026
