India and Iran are set to hold high-level discussions on energy cooperation, with Iranian Oil Minister Mohsen Paknejad meeting officials from the Ministry of Petroleum and Natural Gas (MoPNG) on Thursday, according to sources in oil marketing companies, traders and industry analysts told NDTV Profit. The meeting comes as New Delhi evaluates the possibility of expanding imports of Iranian crude oil after limited purchases resumed earlier this year following a gap of nearly seven years. The discussions are expected to focus on cooperation across the oil and gas sector, including crude supplies, investment opportunities and broader energy ties between the two countries. As per Business Standard, Iran and India discussed strengthening energy cooperation and trade during a meeting between their oil ministers on the sidelines of a BRICS energy ministers gathering in India, with the Iranian oil ministry's news outlet Shana reporting on Thursday.
Iran's central bank Governor Abdolnaser Hemmati announced that the country would be free to receive payments for its oil exports in any currency of its choice, as reported by Al Jazeera. According to a video message shared by Ali Ahmadnia, head of the Iranian government's information office, Hemmati stated that Iran would not be restricted to receiving oil payments in US dollars and could choose alternative currencies depending on its interests and trading arrangements. The central bank governor also indicated that Iran would have flexibility over how its oil exports are transported and how payments are settled. The National Iranian Oil Company (NIOC) has also reached out to Indian refiners and commodity traders to explore future crude sales, sources said. Recent developments show that Iran and the United States signed an interim deal, after which Washington issued a temporary license for the export of Iranian energy products, as reported by Business Standard, which has further facilitated these discussions.
Before US sanctions disrupted trade, Iran was one of India's largest and most reliable crude suppliers, with its share in India's crude basket steadily increasing through the second half of the last decade. According to NDTV Profit analysis, India imported around 11 million metric tonnes (MMT) of crude from Iran in 2015, accounting for roughly 6% of its total crude imports. Purchases increased to 14 MMT in 2016, taking Iran's share to 6.7%, and surged sharply in 2017 to 27 MMT when Iran supplied 12.6% of India's crude requirements—the highest share during the period. While volumes moderated to 23 MMT in 2018, Iran still accounted for 10.4% of India's crude imports, and in 2019, imports stood at 24 MMT, representing 10.6% of India's crude basket before purchases came to an abrupt halt in May 2019. As per Business Standard, India has historically been an important buyer of Iranian crude, but suspended imports in 2019 following the re-imposition of US sanctions on the export of Iranian oil.
According to data from Kpler, India imported around 73,000 barrels per day (bpd) of Iranian crude in June, marking a gradual return of supplies after imports had virtually ceased following tighter US sanctions. While Indian refiners resumed limited purchases of Iranian crude in April this year, industry participants believe a broader revival of imports remains unlikely in the near term. Iran was once among India's largest crude suppliers, with Iranian crude accounting for around 10.5% of India's total oil imports in 2018 before New Delhi halted purchases in May 2019 after the United States ended sanction waivers for Iranian oil buyers. The impact was immediate, with India's imports from Iran collapsing to just 2 MMT in 2020, reducing its share of the country's crude imports to less than 1%.
The comments follow reports of recent negotiations between Iran and the United States, including discussions around the release of about $12 billion in Iranian assets and easing restrictions linked to Iran's oil sector. As reported by Al Jazeera, these developments come at a time when hopes of a broader US-Iran understanding have revived discussions around sanctions relief, oil flows and regional trade. In his video message, Hemmati emphasized that Iran has no obligation to use the funds to buy US agricultural products, as claimed by US officials, but that it is not opposed to doing so if the US products are competitive. The negotiations represent a significant shift in diplomatic relations between the two countries, with the latest developments showing that Iran and the United States signed an interim deal, after which Washington issued a temporary license for the export of Iranian energy products.
