Public sector oil majors are in talks with traders marketing Iranian crude, and are preparing to buy barrels if the US extends waivers beyond August or eases restrictions.

The companies, however, have little room to buy Iranian oil immediately, having fully contracted shipments required through August after they sought to secure supplies in advance during the West Asia war.

Still, refiners may pick up some Iranian cargoes if the discounts are significant, Bloomberg reported.

The talks are instead aimed at securing access to Iranian barrels should Washington extend the waiver beyond the current August 21 deadline.

Sellers of Iranian oil are finding it harder to attract buyers as prices of unsanctioned West Asian grades have collapsed following the ceasefire that helped restart oil flows through the Strait of Hormuz.

Prices of crudes from both within and outside the Persian Gulf have plunged several dollars below underlying benchmarks, narrowing the advantage for Tehran and depriving it of much-needed revenue.

Saudi Arabia underscored the intense competition to find oil buyers in Asia, with the biggest monthly reduction in its official selling prices since at least 2000 this week.

Cargoes from Russia, India’s top supplier since 2023, are selling at steeper discounts, making Iranian oil even less appealing for refiners in India, the world’s third-biggest importer.

Crude from Iran is being offered at discounts of $4 to $5 a barrel to Brent, compared with $6 a barrel less for Russia’s Urals oil, the people said. Iran was one of India’s top suppliers, accounting for as much as 10 per cent of its oil imports in 2018, before US sanctions choked flows.

Indian buyers find the Saudi crude unattractive despite the cuts, because of high freight costs. Instead, the refiners are more inclined to buy Russian grades, and expect discounts to widen.

Well stocked

India’s oil imports from Russia surged to a record 2.7 million barrels a day in June, and are expected to average 2.6 million barrels this month, according to estimates by marine intelligence firm Kpler.

State refiners, including India’s biggest processor, IOC, are also not in a position to take advantage of the 60-day sanctions waiver granted by the Trump administration for purchasing Iranian oil as they booked cargoes well ahead of schedule to prepare for supply disruptions during the war, the people said.

Still, Indian refiners are looking to tie up supplies from Iran so that they don’t lose out if purchases are allowed and pricing becomes more competitive.