India Admits Purchasing Iranian Oil For First Time Since 2019; Relies On Shadow Fleet To Source Supplies

Days after Iranian LPG made way to India, the country has admitted that its refiners have secured crude oil requirements from Iran in what is the first public admission of the purchase of Iranian energy consignments by India since 2019.

The Daily Guardian had reported on April 1 that Indian refiners had resumed purchasing crude oil from Iran.

“India imports crude oil from 40+ countries, with companies having full flexibility to source oil from different sources and geographies based on commercial considerations. Amid Middle East supply disruptions, Indian refiners have secured their crude oil requirements, including from Iran; and there is no payment hurdle for Iranian crude imports, contrary to the rumours being circulated,” India’s Ministry of Petroleum and Natural Gas said in a statement on Thursday.

Highly-placed Indian government sources told The Sunday Guardian that not only has the purchase of Iranian crude oil started but Indian entities are also purchasing LPG from Iran.

However, what is significant about these purchases is that they are mostly being done via intermediaries able to make payments to Iranian entities in the manner they want.

Iran is accepting payments either in Yuan or via its front companies based in other countries or even cyptocurrencies in what aims at its wider attempts at de-dollarisation of the oil trade.

Speaking to TSG, strategic and political analyst Dr Wael Awwad said that Iran is moving at the de-dollarisation of the oil trade – a goal that BRICS has been long eyeing to achieve.

“Iran is moving to implement this at the Strait of Hormuz. If BRICS supports this, it will be signal a collective South-South cooperation,” he said.

Indian National Shipowner’s Association (INSA) CEO Anil Devli told TSG that intermediaries are able to make payments to Iran in the modes preferred by the country.

Moreover, with tensions in West Asia resulting in a sharp increase in war risk insurance costs for the maritime sector, both LPG and crude oil purchasers are dependent on sanctioned vessels or the “shadow-fleet vessels” which have had a history of shipping sanctioned Iranian/Russian oil.

This has led to companies also forced to use old tankers as against the norms issued by the Directorate General of Shipping (DGS) which do not permit vessels aged over 30 years for carrying gas/chemicals and permit vessels aged between 25-30 years only if they fulfil either of the two conditions: in case the vessel is classed with an IACS (International Association of Classification Societies) member or it has CAP 1 rating for Hull and Cap 2 for machinery and cargo systems from an IACS  member.

These mandatory provisions were first issued in an order issued by the DGS in February 2023.

The most recent case of a vessel earlier called as Seabird and now Aurora which, last week, brought around 50000 MT of Iranian LPG to India along with another undocumented vessel.

On March 25, a source in the Iranian government had confirmed to The Sunday Guardian that the vessel was carrying Iranian LPG.

According to ship tracking and maritime intelligence website MagicPort, Aurora arrived near India’s Mangalore Port on March 24, 2026 and was docked at the port on April 2.

A highly-placed source in the government of India said that the vessel has been discharging LPG since it was docked at the Mangalore port and has provided supplies to a Nagpur-based private LPG bottling company Confidence Petroleum Limited and government-owned Hindustan Petroleum Corporation Limited. Along with this particular ship, another ship also brought LPG supplies but its arrival was not recorded in the port records, the source added.

“The vessel has been discharging LPG since April 2. The vessel’s documents were incomplete as it was not classed with an IACS (International Association of Classification Societies) member. It had to wait at the anchorage for three-days as the allocation to Confidence Petroleum and HPCL was not decided. The entities involved were not filling up the import general manifest and paying custom duty which they did after the allocation issue was sorted,” the source said.

An Import General Manifest (IGM) is a mandatory legal document which serves as a passport for goods loaded on a ship by shipping carriers with customs authorities before a vessel or aircraft arrives, detailing all cargo on board.

When contacted, Confidence Petroleum chairman Nitin Khara did not respond to queries from TSG.

However, speaking to TOI Nagpur on Monday, Khara had said that Confidence purchased the consignment by quoting a hefty premium as against the price paid by a Chinese buyer after which the ships were turned towards India from their way to China. Interestingly, Khara had told TOI Nagpur that the purchase was done “from a seller based in UAE.”

HPCL did not respond to queries from TSG.

A senior government official said that Aurora was first denied berthing at the Mangalore port because of lack of documents but was later allowed. The official pointed out that currently, Indian buyers and other Asian buyers too are forced to use sanctioned vessels or vessels belonging to the shadow Iranian fleet due to shortage of ships caused by the high war risk premiums.

“Following the ongoing conflict between Iran and US/Israel, insurance companies have sharply increased war risk insurance costs for both maritime and aviation sectors and the insurers are reassessing exposure amid missile threats, airspace closures and disruption risks. Ample ships are not available due to high war risk premiums being charged by the insurers. Companies don’t want to invest in such ships with exceptionally high war risk premiums but sanctioned ships and vessels belonging to Iran’s shadow fleet are easily available as they are being favoured by the Iranian authorities,” the official said.

Marine cargo war risk premiums for transits through the Strait of Hormuz have registered a sharp increase by as high as 200-300 per cent, with some extreme cases seeing increases of more than 1,000 per cent as attacks and security risks intensify, according to a report by Lockton, the world’s largest private insurance brokerage notes.

“Premiums for tankers and vessels crossing the Strait of Hormuz have risen to around 3%-5% of vessel value, compared with 0.2%-0.5% before the conflict. In certain instances, ships have reportedly struggled to obtain coverage at all as some insurers withdraw from underwriting voyages through the corridor,” the report notes.

Also Read: LPG Crisis Reshapes Urban Workforce: From Delhi To Mumbai, Migrant Labourers Exit Cities, Saying ‘No Gas, Have To Return,’ As Energy Insecurity Deepens Amid US-Iran War