Iranian crude: Reliance Industries denies purchases amid reports and US sanctions waiver

Reliance Industries said on Thursday it did not buy crude oil of Iranian origin. The company said it has made no such purchases since the US temporarily eased sanctions. That easing aimed to calm oil prices after the US-Israeli war on Iran. Reliance also called recent reports about buying Iranian oil incorrect.

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In its statement, Reliance described the claims as unfounded. It said it "categorically rejects\" media reports about any Iranian-origin crude purchases. The company linked its position to the period after the US relaxation. It did not give details of alternative crude sources in the statement.

Iranian crude oil sanctions waiver and payment hurdles

Last weekend, the US waived sanctions for 30 days on buying Iranian oil at sea. The move aimed to reduce oil prices that rose after the US-Israeli war on Iran. About 140 million barrels of Iranian oil are estimated to be on vessels at sea. The waiver permits purchases, but payment routes remain uncertain.

One major issue is that Iran remains outside SWIFT. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is a secure messaging system used by banks worldwide. Without SWIFT access, cross-border payment processing becomes difficult. This has raised questions on how buyers could pay for cargoes allowed under the waiver.

Iranian crude oil imports to India and government view

The government said earlier this week that any return to Iranian oil depends on techno-commercial feasibility. India had earlier bought large volumes of Iranian crude. Refiners used Iranian Light and Heavy grades due to suitable refinery match. Import terms were also seen as favourable by buyers. At its high point, Iran supplied 11.5 per cent of India’s crude imports.

After sanctions tightened in 2018, India’s intake reduced sharply. Imports stopped from May 2019, as buyers shifted to other sources. Volumes were replaced with Middle Eastern, US, and other grades. The switch reflected supply constraints and payment barriers linked to sanctions. Buyers also adjusted refinery plans to manage new crude mixes.

Iranian crude oil and SWIFT disconnection history

Industry sources said past purchases were paid in Euros through a Turkish bank acting as a go-between. Those sources said that route is no longer available. Iran was removed from SWIFT in March 2012 after European Union sanctions. Several Iranian banks were disconnected, restricting many international transactions. This affected the ease of receiving payments for oil exports.

Disruptions increased again in 2018 after the United States reimposed sanctions. Several Iranian banks were again suspended from the network. The restrictions limited Tehran’s ability to trade internationally. They also reduced Iran’s capacity to receive oil payments. Access to foreign currency reserves also became harder under these limits.

With inputs from PTI