China, Iran, and the Oil Market: How New U.S. Sanctions Could Reshape Trade Flows

Key Highlights

• Base oil prices range from ₹61.5–96.5/kg depending on grade and packaging.
• U.S. sanctions on Chinese refiners using Iranian crude may tighten Asian supply.
• Reliance halts Venezuelan oil imports due to new U.S. tariffs.
• India may remove U.S. crude tariffs as part of a broader trade review.

Oil & Gas Price: Mixed Trends Across Base Oils, Fuel Oils & Lubricants

• Base oil prices vary depending on grade and packaging. Bulk-packed options include N150 at ₹63.5/L, SN150 at ₹61.5/L, and N500 at ₹96.5/KG. Barrel-packed prices are generally higher, with N150 at ₹69.5/L and SN500 at ₹90/KG. 
• Fuel oil prices include Virgin 180cST Furnace Oil at ₹47.5-49/KG and Low Sulphur Heavy Stock (LSHS) at ₹56.5/KG. Rubber Processing Oil prices vary between ₹44.5/KG and ₹84/L, depending on the brand and type.
• Hydraulic Oil ranges from ₹87-100/L in barrels and buckets, while Rust Preventive Oil is priced between ₹122-149/L. 
• Gear Oil prices differ based on grade and packaging, ranging from ₹115-134/L.

Oil & Gas Demand-Supply: Iranian Crude Restrictions Could Shift Supply Lines

• As per OILPRICE.COM, The latest U.S. sanctions on Chinese refineries importing Iranian crude represent a significant escalation in efforts to limit Tehran's oil revenues. With Iranian exports currently at 1.5 million barrels per day, nearly all of which go to China, the effectiveness of these sanctions depends largely on Beijing's cooperation. 
• A strict enforcement could tighten global supply, particularly in Asia where Chinese refiners have relied on competitively priced Iranian crude. However, OPEC+'s recent production increase may help offset potential supply disruptions, providing some stability to the market.  
• Current oil prices near $70 per barrel reflect a balance between geopolitical risks and adequate supply. The market appears to be pricing in some disruption risk, though OPEC+'s spare capacity has so far prevented sharper price movements. 
• The situation remains fluid, with the potential for further volatility depending on China's response and whether additional sanctions are implemented. Inventory levels and refinery demand will also play key roles in determining how these supply-side developments translate into actual market conditions.  

Oil & Gas News: Trade Disruptions & Policy Moves

• Reliance Industries has decided to halt crude oil purchases from Venezuela following the U.S. imposition of a 25% tariff on Venezuelan oil imports. This move comes despite Reliance having previously received a U.S. exemption to resume Venezuelan crude imports last year. 
• The decision reflects growing market uncertainty as U.S. sanctions and tariffs continue to disrupt global oil trade, particularly affecting Indian refiners who relied on Venezuelan supplies.  
• Meanwhile, freight rates for Russian oil shipments from Baltic ports to India have declined from recent highs as more Western shipowners re-enter the market, easing transportation costs. 
• On the policy front, India is evaluating the possibility of removing tariffs on U.S. crude oil and diamond imports as part of a broader trade agreement study conducted by the Finance Ministry and NITI Aayog. 
• Additionally, proposed amendments to gas tariffs by the Petroleum and Natural Gas Regulatory Board (PNGRB) could benefit city gas distribution companies, though the broader impact of Venezuela-related trade restrictions remains a key concern for India's energy sector.

Expert Opinion: OPEC Strategy to Drive Short-Term Volatility

• Prices could test the higher end of recent ranges if sanctions prove effective in reducing Iranian exports, though sustained moves above $75 would likely require broader supply disruptions or stronger demand signals.  
• Market participants should watch for signs of Chinese compliance with the sanctions, any retaliatory measures from Iran, and potential adjustments to OPEC+ production policy. The coming weeks may bring increased volatility as these geopolitical factors interact with fundamental market conditions. Longer-term price direction will depend on whether the sanctions achieve their intended effect and how other producers respond to any supply gaps.