US Sanctions Temporarily "Loosened", India Resumes Energy Trade with Iran, First LPG Shipment Set to Arrive

According to Xinhua News Agency, Iran's Ministry of Foreign Affairs issued a statement on March 22 declaring that the Strait of Hormuz has not been closed. Vessels from the United States, Israel, and other countries involved in aggression will be denied passage, but vessels from other non-hostile countries may pass through safely after coordinating with Iranian authorities and complying with relevant safety regulations.

According to Reuters, the phased relaxation of U.S. sanctions on Iran is prompting India to resume energy purchases from Iran after several years.

Three industry sources and LSEG trade flow data indicate that a tanker carrying Iranian liquefied petroleum gas (LPG) is expected to arrive soon at the port of Mangalore on India's west coast. This represents one of India's first purchases of Iranian energy since it halted imports in 2019 under Western sanctions pressure, marking a substantial resumption of energy trade between the two countries.

At the same time, the U.S. has temporarily eased sanctions on Russian crude oil, leading Indian refiners to ramp up purchases. In April, India's imports of Russian crude soared to 60 million barrels, hitting a recent high and boosting Russian crude export revenues to levels not seen since 2022.

Sanctioned Tanker Diverts to India

According to LSEG data and industry sources, the vessel carrying this batch of Iranian LPG is named "Aurora" and is currently under sanction. Originally bound for China, it rerouted to India and is expected to arrive at Mangalore port soon.

This cargo was purchased by the Indian side through a trader. It is noteworthy that Rajesh Kumar Sinha, Special Secretary of India’s Federal Ministry of Shipping, stated at a press briefing on Wednesday, "There is no loaded cargo from Iran, we have not heard of such a case," implying there has been no official government confirmation to date.

Desperate Procurement Amid Gas Shortage

This resumption of Iranian procurement reflects India's current severe energy supply pressure. India is the second-largest importer of LPG globally, consuming 33.15 million tons last year, with about 60% dependent on imports—approximately 90% of which comes from the Middle East.

U.S. and Israeli military actions against Iran have disrupted shipping through the Strait of Hormuz, severely impacting energy-reliant India. India faces its worst natural gas crisis in decades, prompting the government to cut industrial gas supplies in order to prioritize domestic cooking gas needs.

Currently, India is gradually moving LPG tankers stranded in the Strait of Hormuz, with "Shivalik", "Nanda Devi", "Pine Gas", and "Jag Vasant" four vessels already relocated. Meanwhile, LPG is also being loaded onto idle ships stranded in the Persian Gulf.

Sanction Easing Opens Window

This purchase was made possible due to the U.S. temporarily lifting certain sanctions on Iranian crude and refined products, giving buyers like India a short window for action.

India previously maintained significant cooperation with Iran on oil imports, but bilateral energy exchanges have stalled since India withdrew completely in 2019 under Western sanctions pressure.

As India actively explores additional procurement, observers will closely watch whether this sanction easing window can last, and whether India can normalize purchases of Iranian energy—without incurring secondary sanction risks—to alleviate its persistently tight LPG supply situation.