Indian Refiners Settle Iranian Oil Payments in Yuan via ICICI Amid U.S. Waiver Window

Indian refiners have begun settling payments for rare imports of Iranian crude oil in Chinese yuan through ICICI Bank, leveraging a temporary U.S. sanctions waiver that briefly allowed such transactions. The move follows Washington’s 30-day exemption on sanctions for Russian and Iranian oil purchases at sea, introduced to stabilize global energy prices amid tensions linked to the U.S.-Israeli conflict involving Iran. However, U.S. Treasury Secretary Scott Bessent has indicated the waiver will not be extended, with the exemption for Iranian oil set to expire soon.

Under this arrangement, refiners including Indian Oil Corporation and Reliance Industries routed payments in yuan via ICICI’s Shanghai branch to seller accounts, marking an unusual departure from conventional settlement methods. Indian Oil recently purchased 2 million barrels of Iranian crude—its first such deal in seven years—valued at approximately $200 million. Meanwhile, Reliance has received multiple shipments, with at least one cargo already discharged. Sources indicate that around 95% of the payment for one shipment was made upon the vessel’s arrival in Indian waters, deviating from the typical practice of payment upon delivery.

Despite the temporary easing of restrictions, longstanding sanctions on Tehran have continued to complicate payment mechanisms, deterring broader participation from buyers. India had largely halted Iranian oil imports since 2019 due to U.S. pressure, turning instead to discounted Russian crude following sanctions on Moscow after the 2022 Ukraine invasion. While the yuan settlement route has been used previously for Russian oil, Indian Oil is not expected to pursue further Iranian purchases after the waiver expires, signaling that such transactions may remain limited and opportunistic.

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