India’s largest refiner, Reliance Industries, has purchased 5 mn barrels of Iranian crude from the National Iranian Oil Co. under a temporary US sanctions waiver that allows delivery of cargoes already at sea, Reuters reports, citing unnamed sources. The purchase marks India’s first import of Iranian crude since May 2019, when imports were halted following the reimposition of US sanctions.

The cargo was priced at a premium of about USD 7 / bbl to ICE Brent futures, implying an additional cost of roughly USD 35 mn. The US sanctions waiver applies to Iranian crude loaded on or before 20 March and discharged by 19 April, limiting eligible transactions to cargoes already in transit. The move comes as Indian refiners have been diversifying sourcing, including securing more than 60 mn barrels of Russian crude for April delivery under a similar sanctions waiver.

Our take: While other Indian refiners are also keen to buy Iranian Oil, Reliance has shown agility in its purchases in recent weeks. It was among the first Indian refiners to pick up Venezuelan barrels after the US government allowed such sales. Reliance also picked up 6 mn barrels of Russian crude immediately after the US sanctions waiver. Reliance’s complex refinery ecosystem allows it to process crude oil from varied sources, which aids its quick decision making. The conglomerate has also found a place in the good books of the Donald Trump administration with its partnership to set up a refinery complex in Texas.

Accelerating LPG storage and distribution infrastructure

India’s state-run energy marketing companies are moving to expand liquefied petroleum gas (LPG) storage as disruptions linked to the Iran conflict begin to strain supplies of cooking fuel, prompting a renewed focus on building buffer capacity, Hindu Businessline reports.

Storage build-out: Indian refiners and fuel retailers — including Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation — are assessing additional underground storage options, particularly cavern-based facilities, as part of efforts to reduce exposure to supply disruptions and shipping risks affecting LPG imports.

Limited buffers: India’s existing LPG cavern capacity is about 140k tonnes across facilities in Mangaluru and Visakhapatnam. With imports meeting roughly 60% of demand — a large share of which is sourced from the GCC — the current disruption has highlighted constraints in storage coverage for a fuel used by more than 300 mn households.

Stepping in to accelerate natural gas pipelines: Amid the war, the government has unveiled a streamlined regulatory framework to speed up natural gas pipeline development, introducing time-bound approvals and a unified process to cut delays in infrastructure rollout, according to a press release.

Clearing the path for expansion: The Ministry of Petroleum and Natural Gas has invoked its emergency powers, establishing a unified framework for laying, operating, and expanding pipelines. The primary goal is to speed up the construction of trunk pipelines and city gas distribution networks, ultimately driving the wider adoption of piped natural gas (PNG) across key sectors. To smooth the way, the framework scraps ad hoc levies, eases compliance burdens, and establishes clear compensation guidelines to minimize right-of-way disputes with landowners.

Our take: While India is tapping alternative sources — from Iran to Russia — to bolster its crude oil supplies, its gas supplies remain vulnerable in the absence of reliable alternative sources. The Gulf region accounts for the bulk of India’s LPG imports, leaving the availability of domestic cooking gas susceptible to disruptions in the Strait of Hormuz. The government and energy firms are now implementing much-needed long-term measures to brace for future impacts. However, these moves also indicate that the government's policy options are limited — without unhindered access to Hormuz, the crisis in gas markets is unlikely to be resolved.

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