NEW DELHI: A US-sanctioned tanker carrying Iranian crude oil has rerouted mid-voyage from its previously indicated destination of India, where it would have marked the first such shipment in nearly seven years to China.
The Aframax tanker Ping Shun, built in 2002 and sanctioned by the US in 2025, is now signalling Dongying in China as its destination instead of Vadinar in Gujarat, which it had indicated earlier this week, according to ship-tracking firm Kpler.
There is no confirmation that the destination indicated by the ship’s Automatic Identification System (AIS) transponder, a tracking system mandated on most commercial vessels, is final, as it may change at any time during transit.
“An Iranian crude vessel, Ping Shun, that had been en route to Vadinar, India, over the past three days has dropped India as its declared destination near arrival and is now signalling China,” said Sumit Ritolia, Lead Research Analyst (Refining and Modelling) at commodity market analytics firm Kpler.
The oil on Ping Shun would have been the first Iranian crude that India had purchased since 2019.
Indian refiners have been exploring opportunities to purchase a few cargoes of Iranian oil at sea following the recent sanctions waiver by Washington.
According to Ritolia, the shift in destination of Ping Shun appears to be payment-related, with sellers tightening terms and moving away from the earlier 30–60 day credit window towards upfront or near-term settlement.
It is not clear who the actual seller and buyer of the crude are.
Vadinar is home to a 20-million-tonne-per-year oil refinery operated by Rosneft-backed Nayara Energy.
“While such mid-voyage destination changes are not unprecedented with Iranian crude, they highlight the increasing sensitivity of trade flows to financial terms and counterparty risk,” he said.
“If the payment issues are resolved, the cargo could still make its way to an Indian refinery. However, the episode underscores how commercial terms are becoming as critical as logistics in determining Iranian crude flows to countries other than China.”
India’s oil ministry has so far maintained that techno-commercial feasibility will drive any decision on resuming imports of Iranian crude.
Historically, India was a major buyer of Iranian oil, importing significant volumes of Iranian light and heavy grades due to strong refinery compatibility and favourable commercial terms.
Following tighter sanctions in 2018, imports ceased from May 2019, with volumes replaced by Middle Eastern, US and other grades.
At its peak, Iranian crude accounted for 11.5 per cent of India’s total imports. India imported 518,000 barrels per day (bpd) in 2018, which declined to 268,000 bpd between January and May 2019 when the US granted waivers to a few buyers. There have been no imports since.
The key grades that Indian refiners previously purchased were Iran Light and Iran Heavy crude.
Last month, the US waived sanctions on the purchase of Iranian oil at sea for 30 days in an attempt to ease oil prices driven up by the US-Israel war involving Iran. The window expires on April 19.
An estimated 95 million barrels of Iranian oil are currently at sea, of which around 51 million barrels could be sold to India, while the remainder are better suited for buyers in China and Southeast Asia.
Ping Shun is estimated to be carrying about 600,000 barrels of oil loaded from Kharg Island around 4 March. Its declared estimated time of arrival (ETA) at Vadinar was 4 April, according to Kpler.
While the US waiver allows countries to purchase these barrels, it remains unclear how payments will be processed.
Iran remains cut off from SWIFT (the Society for Worldwide Interbank Financial Telecommunication), a global messaging network used by banks and financial institutions to securely send and receive transaction information.
Previous purchases from Iran were conducted in euros using a Turkish bank as an intermediary, but that option is no longer available.
Iran was first disconnected from the SWIFT system in March 2012 following European Union sanctions over its nuclear programme, severely restricting global financial transactions.
Further disruptions occurred in 2018 after the US reimposed sanctions, leading to renewed suspension of several Iranian banks and significantly limiting Tehran’s ability to conduct international trade, receive oil payments, and access foreign currency reserves.