India and Iran are set to hold high-level discussions on energy cooperation, with Iranian Oil Minister Mohsen Paknejad likely to meet officials from the Ministry of Petroleum and Natural Gas (MoPNG) on Thursday, 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.
The National Iranian Oil Company (NIOC) has also reached out to Indian refiners and commodity traders to explore future crude sales, sources said.
However, industry executives cautioned that any significant increase in Iranian oil imports will depend on greater clarity over US sanctions, which continue to remain the biggest hurdle for Indian buyers.
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Apart from sanctions, payment mechanisms, shipping logistics and insurance arrangements remain key issues that need to be resolved before imports can be scaled up.
As a result, refiners are expected to adopt a cautious approach despite softer global crude prices and Iran’s willingness to regain market share in India.
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.
Iran was once among India’s largest crude suppliers. In 2018, Iranian crude accounted for around 10.5% of India’s total oil imports before New Delhi halted purchases in May 2019 after the United States ended sanction waivers for Iranian oil buyers.
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.
Any meaningful increase in purchases will ultimately depend on the commercial attractiveness of Iranian crude, the availability of reliable payment channels and, most importantly, greater certainty around the evolving US sanctions regime.