US Sanctions Temporarily "Loosened," India Restarts Iran Energy Trade, First LPG Shipment Arriving Soon

According to Xinhua News Agency, the Iranian Ministry of Foreign Affairs issued a statement on March 22nd stating that the Strait of Hormuz has not been closed. Ships belonging to the United States, Israel, and other participating aggressor countries will be denied passage, but ships from other non-hostile countries can pass safely after coordinating with Iranian authorities and complying with relevant safety regulations.

According to Reuters, the phased easing of U.S. sanctions on Iran is prompting India to restart energy imports after years of suspension.

Three industry sources and LSEG trade flow data indicate that a tanker carrying Iranian liquefied petroleum gas (LPG) is expected to arrive at Mangalore on India’s west coast. This marks India’s first energy procurement from Iran since 2019, when Western sanctions interrupted energy imports. This move signifies a substantial restart of energy trade between the two countries.

Meanwhile, the U.S. has temporarily relaxed sanctions on Russian crude oil, prompting Indian refineries to increase purchases. In April, Russian oil imports surged to 60 million barrels, reaching a recent high, boosting Russian oil export revenues to their highest level since 2022.

Sanctioned Oil Tankers Re-route to India

According to LSEG data and sources, the tanker carrying this batch of Iranian LPG is named “Aurora.” The vessel is under sanctions and was originally headed to China but has now turned toward India. It is expected to arrive at Mangalore port in the short term.

This cargo was purchased by an Indian trader. Notably, Rajesh Kumar Sinha, Secretary of the Indian Federal Shipping Department, stated at a press conference on Wednesday, “There are no loaded goods from Iran; we haven’t heard of such a situation,” implying that the government has not officially confirmed this matter.

Severe Gas Shortage, Urgent Procurement Needs

The restart of Iranian LPG procurement reflects India’s current severe energy supply pressures. India is the world’s second-largest LPG importer, with consumption reaching 33.15 million tons last year, about 60% of which depends on imports, with approximately 90% coming from the Middle East.

U.S.-Israeli military actions against Iran have disrupted Strait of Hormuz shipping, severely impacting India, which is highly dependent on Middle Eastern energy. India is facing its worst natural gas crisis in decades, with the government reducing industrial gas supplies to prioritize household cooking gas.

Currently, India is gradually rerouting LPG tankers stranded in the Strait of Hormuz. Four tankers—“Shivalik,” “Nanda Devi,” “Pine Gas,” and “Jag Vasant”—have completed transfers, and efforts are underway to load LPG onto idle ships stranded in the Persian Gulf.

Sanction Easing Opens Window

The key factor enabling this procurement is the temporary lifting of some sanctions by the U.S. on Iranian oil and refined products, providing buyers like India with a brief operational window.

India previously maintained significant cooperation with Iran on oil imports but halted bilateral energy exchanges in 2019 under Western sanctions pressure.

As India actively explores additional purchases, the outside world will closely watch whether the sanctions easing window can be sustained and whether India can normalize its energy procurement from Iran without risking secondary sanctions, thereby alleviating its ongoing LPG supply tensions.

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