Since 2019, India has never imported Iranian Oil due to pressure from the United States.
The United States has banned Indian companies on account of their involvement with Iran in loading and transporting Iranian Oil.

The US imposes sanctions:

The United States took a rare and difficult step. On Monday, the United States Department announced that it had sanctioned four Indian companies and 12 other foreign entities.

Also Read: Oil Prices Surge For 2nd Day Amid US Sanctions On Iran & Supply Concerns

The US government took a major step and halted Iran’s oil trade. As per the US government, Iran uses oil revenues to benefit the militant groups. That is why the US plans to sanction Iran’s alliances in Oil Trade. The US sanctioned the Indian companies and other foreign entities under Executive Orders 13846 and 13902.

Indian Companies sanctioned:

Four Indian companies are sanctioned. The US claims they helped transport Iranian crude oil to buyers in Asia. These companies are Austionship Management Private Limited, based in Noida and South Delhi; BSM Marine LLP, located in Haryana; Cosmos Lines Inc., operating in Tamil Nadu and Marshall Islands; and Flux Maritime LLP, based in Maharashtra. According to the US government, these firms played a key role in moving Iranian oil. They allegedly helped disguise shipments and misled global authorities.

Execution of Sanctioned firms:

The US accuses these Indian companies of being part of a secretive oil trade network. It says they helped transport tens of millions of barrels of Iranian crude oil. The shipments were worth hundreds of millions of dollars. The US claims these firms used deceptive tactics to move oil.

Global impact of the sanctions:

The sanctions do not only affect Indian companies. China, the UAE, Malaysia, Seychelles, Liberia, and Panama are also affected. It suggests that Iran’s oil trade has deep international links. Many of these sanctioned companies operate in the shipping sector. They allegedly use a mix of front companies and fake documents to disguise Iranian oil shipments.

India’s energy ties with Iran:

India and Iran have had strong energy ties for decades. Iran was once a major oil supplier to India. However, US sanctions forced India to stop importing Iranian oil in 2019. Despite this, Iran remains interested in expanding trade with India. In January 2024, Iran signaled its plan to restart oil exports. It also expressed interest in growing petrochemical trade through the Chabahar port in India.

The Chabahar port is a strategic project for both nations. It allows India to trade with Afghanistan and Central Asia while bypassing Pakistan. Iran sees this port as a key trade hub, even under US sanctions.

Sanctions affect Indian businesses:

The sanctions could have serious consequences for the Indian companies involved. Sanctioned firms may face restrictions from global shipping networks. The US and European banks might refuse transactions linked to these firms. Indian companies named in the sanctions list may struggle to secure new business deals.

China and the UAE were affected:

China and the UAE are also affected by the US move. China has always been the biggest buyer of Iranian oil. It is a major energy trade hub. Some companies based in these countries are accused of helping Iran bypass trade restrictions. The US wants to tighten control over Iran’s oil exports and ensure compliance with its sanctions.