Kamal Ghorui
NEW DELHI: A US-sanctioned tanker carrying Iranian crude oil rerouted mid-voyage from India to China, with payment-related issues appearing to be the main reason behind the change in declared destination.The Aframax tanker Ping Shun, built in 2002 and sanctioned by the US in 2025, had earlier indicated Vadinar in Gujarat as its destination. If the cargo had reached India, it would have marked the country’s first Iranian crude purchase in nearly seven years.According to ship-tracking firm Kpler, the vessel is now signalling Dongying in China instead of Vadinar.There is no confirmation that the destination shown on the ship’s Automatic Identification System (AIS) transponder is final, and it may still change 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 analytic firm Kpler.According to Ritolia, the rerouting appears to be linked to tightening payment terms.“The shift in destination of Ping Shun appears to be payment-related, with sellers tightening terms, moving away from the earlier 30-60 day credit window toward upfront or near-term settlement.”It was not clear who the actual seller and buyer of the crude were.The development comes at a time when Indian refiners have been exploring opportunities to buy a few cargoes of Iranian oil at sea after the US last month waived sanctions on such purchases for 30 days.That waiver window expires on April 19.While the waiver allowed countries to buy Iranian oil already at sea, the key challenge remains payments.Iran continues to remain outside SWIFT (Society for Worldwide Interbank Financial Telecommunication), the global banking messaging system used by financial institutions to securely send and receive transaction information.Earlier purchases from Iran were made in Euro through a Turkish bank, but that option no longer exists.Iran was cut off from the SWIFT system in March 2012 following European Union sanctions over its nuclear programme. Further disruptions came in 2018 after the US reimposed sanctions, sharply restricting Tehran’s ability to receive oil payments, conduct international trade and access foreign currency reserves.The Ping Shun is estimated to be carrying around 600,000 barrels of crude that was loaded from Kharg Island around March 4. Its declared ETA to Vadinar was April 4, according to Kpler.Vadinar is home to the 20 million tonnes a year refinery of Rosneft-backed Nayara Energy.If delivered, the cargo would have been the first Iranian crude shipment to India since 2019.India was once a major buyer of Iranian oil, importing significant volumes of Iran light and Iran heavy grades because of strong refinery compatibility and favourable commercial terms.But after sanctions tightened in 2018, imports stopped from May 2019, with those volumes replaced by crude from the Middle East, the US and other sources.At its peak, Iranian crude accounted for 11.5 per cent of India’s total oil imports.India imported around 518,000 barrels per day of Iranian oil in 2018. That fell to 268,000 barrels per day between January and May 2019, when the US had granted waivers to a few buyers. There have been no imports since then.India’s oil ministry has so far maintained that any decision on resuming Iranian crude purchases would depend on techno-commercial feasibility.According to estimates, around 95 million barrels of Iranian oil are currently on vessels at sea. Of this, about 51 million barrels could be sold to India, while the rest is considered more suitable for buyers in China and Southeast Asia.Ritolia said the latest rerouting shows how financial terms are becoming central to the movement of Iranian crude.“While such mid-voyage destination changes are not unprecedented with Iranian crudes, 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 other countries apart from China.”
