Whalesbook
Why Refiners Are Avoiding the Cargo
The Very Large Crude Carrier (VLCC) Derya arrived off Gujarat this week, carrying an estimated 2 million barrels of Iranian crude. However, Indian refiners are apprehensive. The main worry is the cargo's loading date, likely March 28, 2026, which was after the March 20, 2026 deadline for oil already on tankers, according to a US Office of Foreign Assets Control (OFAC) license. Accepting this cargo could expose any buyer to strict secondary US sanctions, making Indian companies like Indian Oil Corporation and Reliance Industries, which had recently bought Iranian oil, hesitant. The sanctions waiver was set to expire by April 19, 2026, adding urgency to the risky situation.
Geopolitical Tensions Intensify
The situation is unfolding amid rising geopolitical tensions. The US Navy blockaded Iranian ports on Monday, April 14, 2026, after peace talks between Washington and Tehran failed. This move, meant to cut Iran's oil income, showed a firm stance against more sanction waivers. The Derya, operated by the US-sanctioned National Iranian Tanker Company (NITC), likely passed through the Strait of Hormuz, a key global oil route, before the blockade fully took effect. The tanker's minimal movement since its arrival suggests a standstill, with no buyers willing to take on the risks.
Contrast With Other Suppliers and Past Deals
The Derya's situation is very different from the steady oil supplies from traditional partners. Countries like Saudi Arabia, the UAE, and Russia still supply large amounts of crude, with prices mainly affected by stability, not sanctions. In the past, when sanctions on Iran eased, India briefly increased imports. But these flows were short-lived and could change suddenly, as when India stopped buying Iranian crude in May 2019 after the US reimposed sanctions under the Trump administration. Current oil prices, with Brent around $90 a barrel and WTI near $85, show concerns about supply, worsened by regional instability.
The High Risks of Taking on the Cargo
The tanker's situation presents major risks for anyone thinking about buying its cargo. Firstly, violating the US sanctions waiver terms makes the oil unacceptable to most international buyers. Potential buyers might be entities less worried about US ties, like China, but even that is uncertain due to Beijing's own risk calculations. Secondly, the Derya is a sanctioned vessel operated by NITC, which adds operational and reputational risks. Unlike large oil companies or refiners that use carefully chosen suppliers, buying this oil would be a big gamble against international financial and regulatory systems. The broader geopolitical climate, including the Strait of Hormuz's vulnerability, constantly threatens secure supply chains. Analysts see this incident as proof that oil prices are rising due to geopolitical risk. They stress the need for importers to focus on reliable, sanctioned supply routes.
Outlook: Caution and Diversification Needed
Experts expect the Derya will have a hard time finding a buyer. This could mean major losses for its owners or a move to less regulated markets. For India, this event highlights the importance of its wide-ranging energy diversification strategy. Although sanctions waivers might offer short-term chances, the constant volatility and risk of secondary sanctions mean long-term energy security will still rely on stable supply deals. Brokers generally expect that while Middle East supply issues can cause short-term price jumps, the market is adapting by favoring reliable, redundant supplies over risky, opportunistic deals.