India puts the first major crack in Trump’s Iranian sanction play. What’s next?

Reuters reports India allows state refiners to use Iran tankers, insurance for oil imports.

India is allowing state refiners to import Iranian oil with Tehran arranging tankers and insurance after firms including the country’s top shipper Shipping Corp of India (SCI) halted voyages to Iran due to U.S. sanctions, sources said.

New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC).

The moves by the two top buyers of Iranian crude indicate that the Islamic Republic may not be fully cut off from global oil markets from November, when U.S. sanctions against Tehran’s petroleum sector are due to start.

New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States.

Under a CIF arrangement, Iran would provide shipping and insurance, enabling Indian refiners to continue purchases of the country’s oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington.

The move would benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31.

India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period.

State refiners, which drove India’s July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.

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This is a great deal for India and Iran.

If the EU accepted a similar deal, Trump’s sanctions would crumble on the spot, and that would be the end of it (other than the resultant massive howls and threats).