A US tanker carrying Iranian crude, India’s first oil purchase from Tehran since 2019, reportedly changed course mid-way and is now heading to China. The Aframax tanker, the Ping Shun, sailed to India earlier this week, carrying about 600,000 barrels of oil loaded from Kharg Island around March 4.
The Ping Shun, which was built in 2002 and sanctioned by the US in 2025, is owned by China-based Nycity Shipmanagement and is often linked to shipping Iranian oil.
Where is Ping Shun?
Where is Ping Shun?
The Ping Shun initially signaled a scheduled arrival at the port of Vadinar in Gujarat on Saturday 4 April. But according to ship tracking data, Ping Shun is currently signaling Dongying in China as its target.
There is no confirmation that the destination indicated by a ship’s Automatic Identification System (AIS) transponder – the tracking system mandated on most commercial vessels – is final and cannot change at any time during transit.
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“Iranian crude ‘Ping Shun’, which was on its way to Vadinar in India for the past three days, has left India as its declared destination near arrival and is now signaling China,” Sumit Ritolia, senior research analyst, refining and modeling at commodity market analysis firm Kpler, told PTI.
Why was Ping Shun redirected?
Why was Ping Shun redirected?
According to Ritolio, Pin Shun’s change in destination appears to be related to payments, with sellers tightening terms and moving away from the former 30-60 day credit window toward upfront or near-future settlement.
It was not clear who was the actual seller and buyer of the oil.
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“While such mid-route destination changes are not unprecedented for Iranian oil, they highlight the increasing sensitivity of trade flows to financial conditions and counterparty risk,” he said.
“If the payment issues are resolved, the cargo could still reach an Indian refinery. But this episode underscores how terms of trade are becoming as critical as logistics in determining the flow of Iranian oil to countries other than China.”
US eases sanctions on Iranian oil
US eases sanctions on Iranian oil
In mid-March, nearly three weeks after Operation Epic Fury, the US temporarily lifted sanctions on Iranian oil for 30 days, allowing the sale of about 140 million barrels of oil and petroleum products already loaded on ships. The unusual move follows Iranian retaliation against US-Israeli strikes, including the closure of the Strait of Hormuz and attacks on oil and gas infrastructure in the Middle East.
This exemption from sanctions has allowed countries, including India, which was a major buyer of Iranian oil until US sanctions in 2018, to resume buying oil from Tehran.
Buying Iranian oil in India
Buying Iranian oil in India
India bought 518,000 barrels per day of Iranian oil in 2018, which slowed to 268,000 barrels per day between January and May 2019 when the US granted an exemption to several buyers. No imports have taken place since then.
It was estimated that of the 95 million barrels of Iranian oil in vessels at sea, 51 million barrels could be sold to India, while the rest could be sold to China and other Southeast Asian countries before the temporary window expires on April 19.
Iran demands payment for oil in yuan
Iran demands payment for oil in yuan
According to reports, the redirection of Ping Shun to China could be related to the payment method. Although the US has issued a 30-day waiver for Iranian oil sales, it is unclear how payments will be made as Tehran remains cut off from SWIFT, the global messaging network used by banks and financial institutions to securely send and receive information about financial transactions.
Read also | Three Omani-flagged tankers enter Strait of Hormuz, avoiding Iranian waters
Recently, following Iran’s decision to allow some vessels to transit through the Strait of Hormuz, it was reported that Tehran was setting up a “toll” at the critical passage to allow ships paying around $2 million in Chinese yuan rather than US dollars to pass through.
Key things
- The rerouting of oil tankers reflects the changing dynamics of international oil trade affected by sanctions and payment methods.
- India’s previous heavy dependence on Iranian oil has been severely affected by US sanctions, leading to complicated trade relations.
- Payment issues are becoming increasingly important in determining the flow of Iranian oil, with sellers now favoring upfront payments.
