India has reportedly purchased its first cargo of Iranian liquefied petroleum gas in years, in a tactical shift after the US temporarily eased sanctions, Reuters reports, citing unnamed sources. The tanker Aurora, originally bound for China, was diverted and is expected to arrive at Mangalore along India’s west coast.

Crisis response: The cargo will be split between Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. With LPG imports heavily reliant on the Gulf region, India is also working to move stranded cargoes and explore alternate supplies.

Why it matters: Notably, the cargo payments were settled in INR, bypassing the SWIFT-linked USD system. By securing Iranian supply, India is creating a relief valve for industrial and household users as traditional transit through Hormuz becomes increasingly volatile. This comes after the government refuted reports that India-bound vessels transiting the Strait will be subjected to a transit levy.

Limited barrels, logistics blunt India’s Iran oil plans

On the other hand: India’s attempt to tap Iranian crude under the sanctions waiver is faltering due to tight supply and execution roadblocks, with most available barrels now being redirected to China, Business Standard reports.

Overstated volumes: The scale of Iranian crude available under the US sanctions waiver is far smaller than headline estimates. While Washington suggested up to 140 mn barrels could be unlocked, estimates point to roughly 55 mn barrels in transit and about 15 mn barrels in floating storage — making the actual accessible supply significantly lower. Only 10 mn of these barrels are available for Indian refiners as 40 mn barrels of Iranian crude are stored on shore and 10 mn floating off shore in China.

India’s limited window: Even within the waiver period, India’s access remains constrained by logistics and payment complexity. Much of the trade is handled by entities linked to the Islamic Revolutionary Guard Corps (IRGC), complicating sanctions compliance for Indian buyers.

Our take: China remains the dominant buyer of sanctioned Iranian oil, with established trading networks and onshore storage. For India, Iranian crude remains a tactical option rather than a scalable supply solution. With the IRGC involved, USD payments remain a sanctions minefield. Traders are reportedly demanding CNY — a currency Indian state refiners are structurally averse to using for large-scale energy imports.

In other energy news

SaudiAramco is set to supply lower crude volumes to Asia’s two largest buyers — China and India — for April deliveries due to disruptions in the export routes, Bloomberg reports. Shipments to China are expected at about 40 mn barrels, down from 48 mn barrels earlier, while volumes to India are seen at roughly 23 mn barrels versus 25 mn-28 mn barrels in recent months.

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