Several Asian nations have quietly finalized energy agreements with Iran in recent weeks, according to regional diplomats and oil industry analysts, as a U.S. deadline looms for stricter enforcement of sanctions against Tehran. The deals come ahead of President Trump’s April 1 deadline for nations to stop buying Iranian oil or face secondary sanctions.
China, India and South Korea – which together accounted for 65% of Iran’s oil exports before sanctions were reimposed – have been negotiating exemptions and payment mechanisms that would allow continued trade, multiple sources familiar with the discussions confirmed. ‘These aren’t public deals, but there’s clear movement to establish alternative channels,’ said one Singapore-based commodities trader who requested anonymity due to the sensitivity of the talks.
The Trump administration has warned it will not extend waivers granted in 2019, when sanctions were first reimposed after the U.S. withdrew from the Iran nuclear deal. However, analysts note that enforcement capabilities may be limited given current U.S. naval commitments elsewhere. ‘The Strait of Hormuz remains the world’s most important oil chokepoint,’ said energy analyst Fatih Birol of the International Energy Agency. ‘Complete enforcement would require resources Washington may not be able to spare.’
Market reaction has been muted so far, with Brent crude trading at $82 per barrel, up 3% since the deadline was announced. However, shipping insurance costs for Persian Gulf routes have risen 18% month-over-month, according to Lloyd’s of London data.