Iran is likely to struggle to clear its oil inventories even after restrictions on its energy exports were lifted, as its largest customer adjusts its energy strategy and global supplies from other producers remain abundant.
The development suggests that the temporary regulatory reprieve may not translate into a significant surge in Iranian crude flows to the market.
Major Asian refiners, including key buyers in India and China, are exercising caution in purchasing Iranian crude.
Despite the 60-day US sanctions waiver that took effect on Sunday, buyers are weighing compliance risks and the potential for renewed geopolitical hostilities.
Indian refiners, in particular, are facing significant headwinds in accessing Iranian crude, with many opting to source from alternative suppliers to avoid regulatory uncertainty.
China, traditionally Iran’s biggest customer, is becoming less enthusiastic about increasing its purchases.