Indian refiners have begun settling payments for Iranian crude oil in Chinese yuan, marking a significant shift in trade settlement practices driven by tightening sanctions constraints on Tehran and evolving global currency usage in energy markets. The transactions, reportedly routed through a private banking channel via Shanghai, come after a short-term waiver granted by the United States allowed limited crude imports from Iran to resume temporarily.

The development underscores the growing complexity of international oil payments under sanctions regimes, as well as the expanding role of non-dollar currencies in global commodity trade.

According to trade and industry sources, the United States issued a one-month sanctions waiver on March 20 permitting select buyers, including Indian refiners, to purchase Iranian crude oil under restricted conditions. Washington has indicated that the waiver will not be extended, raising uncertainty over the future of such transactions.

The waiver briefly reopened a narrow window for Iranian oil to re-enter the Indian market after a gap of seven years. India had halted imports of Iranian crude in 2019 following the tightening of US sanctions aimed at restricting Tehran’s oil revenues.

The temporary relaxation has allowed Indian buyers to test limited procurement volumes while simultaneously navigating compliance risks and payment restrictions tied to the US financial system.

State-run and private refiners in India have reportedly resumed buying Iranian crude in small quantities during the waiver period. Among the transactions, Indian Oil Corporation purchased approximately 2 million barrels of Iranian crude in April. The cargoes are estimated to be worth around $200 million, making it the country’s first documented purchase of Iranian oil since the........

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