Summary: This blog examines the October 2025 OFAC sanctions targeting Iranian oil trade, which included eight Indian nationals and nine Indian companies on the Specially Designated Nationals list. It analyzes the legal framework behind these sanctions, their practical implications for affected parties, available delisting options, and the broader risks facing Indian businesses engaged in cross-border trade.
Introduction
On October 9, 2025, the United States’ (‘US’) Department of the Treasury’s Office for Foreign Asset Control (‘OFAC’) sanctioned over 50 individuals, entities, and vessels suspected of facilitating sale of Iranian oil and LPG gas.[1]
Among the sanctioned are eight Indian nationals and nine Indians companies.[2] They are now included in the OFAC Specially Designated Nationals and Blocked Persons Lists (‘SDN’), alongside what OFAC considers ‘Iranian backed militias’ targeting Americans.
Out of the nine sanctioned companies, eight are involved in the petrochemical distribution business, and one is responsible for shipping. Similarly, of the eight individuals sanctioned, five serve as directors in the aforementioned petrochemicals business, and three are owners of vessels recognised by the OFAC as responsible for facilitating Iranian oil trade.
This is in keeping with the OFAC’s last tranche of sanctions in July 2025 against six Indian companies involved in Iranian oil trade, which were held to have purchased Iranian oil.[3]
Background Trends
In August 2018, the President of the United States issued Executive Order (‘EO’) 13846, which restored all US sanctions that had been lifted or waived under the Joint Comprehensive Plan of Action, following the United States’ withdrawal from the agreement on May 8, 2018. EO 13846 serves as the foundational basis for sanctions against Iran.
Subsequently, Executive Order 13902 was issued in January 2020, which empowered the Secretary of Treasury to block properties and interests of individuals and entities that operate in a select few sectors of the Iranian economy. These included petroleum and petrochemicals, as well as foreign financial institutions facilitating Iran’s cash flows and knowingly contravene the imposed sanctions.[4] This EO also enables secondary sanctions on foreign individuals or firms outside the US.
The sanctions against Iran by the US were further reinforced by the National Security Presidential Memorandum-2, released on February 4, 2025. It reaffirms maximum pressure against Iran. Treasury was directed to sanction all persons contributing to Iranian revenues and cash flows, and ensuring their strict implementation.
Given President Trump articulated his intention to employ sanctions as a robust mechanism for cross-border adherence to US foreign policy objectives, international businesses increasingly face risks and are incentivised to re-align their business operations with such goals.
Implications
For individuals and entities subject to sanctions, the impact primarily arises from entities and financial institutions within the United States. First, all property and property interests held by, or for the benefit of, sanctioned individuals or entities, in possession or control of US nationals, are subject to blocking, and may not be transferred, withdrawn, or otherwise dealt with. US nationals in possession or control of such property are also obligated to report it to relevant governmental authorities.
Second, enterprises in which the sanctioned persons have, directly or indirectly, 50% ownership interests are also subject to blocking requirements, regardless of if ownership is held individually or in the aggregate.
Third, all US nationals, as well other nationals currently within the US are prohibited from engaging with the abovementioned blocked property or property interests. Any violations of such measures might invite penalties and action under the OFAC’s Economic Sanctions Enforcement Guidelines.[5]
Fourth, in light of the US’ international record, the OFAC states that it may opt to undertake secondary sanctions against ‘foreign financial institution(s)’ situated outside its jurisdiction, if they facilitate the activities of sanctioned persons. This may restrict the ability of sanctioned persons to pursue alternative mechanisms to continue commercial activities.
Fifth, with emerging trade tensions between the US and China, including a potential 100% additional tariffs,[6] Indian businesses are well placed to join and replace established players in the global supply chain. However, non-compliance with OFAC stipulations may prevent companies from being able to realise this objective.
Delisting Options
Australia,[7] China,[8] and the European Union[9] have historically adopted legislation known as ‘blocking statutes’, which seek to prevent the enforcement of mostly secondary sanctions by the United States on their businesses. India is yet to adopt any such measures, perhaps to enhance global business integration rather than hinder international trade relations. However, India has consistently stated that it does not subscribe to unilateral sanction measures,[10] and has voted against them at the UN.[11]
Accordingly, Indian businesses must apprise themselves of legal options in response to OFAC sanctions. The OFAC states that ‘the ultimate goal of sanctions is not to punish, but to bring about a positive change in behaviour.’[12] Thus, persons can remove themselves from the SDN list by filing a petition before the OFAC.
For this, persons may seek delisting on grounds that the original listing took place based on insufficient evidence.[13] Alternatively, the petition may also prefer that the behaviour of the sanctioned persons is now compatible with OFAC stipulations.[14] Finally, if the conditions and reasons mentioned by the OFAC no longer persists, the sanctioned name may be removed.[15] The OFAC also removes the name of an SDN-listed person, when he/ she dies.[16]
To successfully delist any person from the SDN, it may be necessary for persons to solicit the underlying materials referred to by the OFAC in making its decision.[17] Additionally, such delisting may require continuous interaction with the OFAC, including responding to questionnaires clarifying the nature and authenticity of the grounds pleaded by the sanctioned person seeking delisting. Responses deemed unsatisfactory or misleading by the OFAC may lead to longer lead times and potential denial.[18] Thus, accurate knowledge, legal advice and professional assistance are required to navigate these procedures.
Conclusion
Currently, India has not enacted any blocking statutes that may enable it to counteract the sanctions employed by other States. Accordingly, Indian businesses are not protected from primary or secondary sanctions by law. Thus, businesses with commercial links across borders should take the appropriate risk assessment and legal liability analysis to reduce any financial or strategic exposures under such circumstances.
[1] US Department of the Treasury, ‘Treasury Dismantles Key Elements of Iran’s Energy Export Machine’ (9 October 2025) <https://home.treasury.gov/news/press-releases/sb0275>.
[2] Sukalp Sharma, ‘US sanctions 9 Indian companies, 8 Indian nationals over alleged participation in Iran’s energy trade’ The Indian Express (10 October 2025) <https://indianexpress.com/article/business/us-sanctions-indian-companies-nationals-over-participation-in-iran-energy-trade-10298776/>.
[3] Lalit K Jha, ‘U.S. sanctions Indian nationals and firms in global crackdown on Iran’s oil network’ The Hindu (31 July 2025) < https://www.thehindu.com/news/international/us-sanctions-indian-nationals-and-firms-in-global-crackdown-on-irans-oil-network/article69876817.ece>.
[5] OFAC, ‘Economic Sanctions Enforcement Guidelines’ 31 CFR Part 501 <https://ofac.treasury.gov/media/7566/download?inline>.
[6] Associated Press, ‘Trump threatens tech export limits, new 100% tariff on Chinese imports’ NPR (11 October 2025) <https://www.npr.org/2025/10/11/g-s1-93113/trump-threatens-100-tariff-chinese-imports>.
[7] Foreign Proceedings (Excess of Jurisdiction) Act 1984, s 7; Foreign Evidence Act 1994, s 42.
[8] MOFCOM Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures 2021; Law of the PRC on Countering Foreign Sanctions 2021,
[9] Council Regulation (EC) No 2271/96 of 22 November 1996 protecting against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom, OJ L 309, 29.11.1996, pp. 1–6.
[10] PTI, ‘India does not subscribe to any unilateral measures, government says on EU sanctions’ The Hindu (19 July 2025) <https://www.thehindu.com/news/national/india-does-not-subscribe-to-any-unilateral-measures-government-says-on-eu-sanctions/article69829177.ece>.
[11] ‘UN Human Rights Council: India Votes Against Unilateral Sanctions on Countries’ The Wire (6 April 2023) < https://m.thewire.in/article/diplomacy/un-human-rights-council-india-votes-against-unilateral-sanctions-on-countries/amp?utm=relatedarticles> (‘But analysts say India has always voted against unilateral sanctions.’).
[12] OFAC, ‘Filing a Petition for Removal from an OFAC List’ <https://ofac.treasury.gov/specially-designated-nationals-list-sdn-list/filing-a-petition-for-removal-from-an-ofac-list>.
[13] 31 CFR § 501.807(a).
[14] ibid.
[15] ibid.
[16] ibid.
[17] 31 CFR § 501.807(b).
[18] 31 CFR § 501.805.