US-Sanctioned Iranian Tanker Diverts from India to China Mid-Voyage

In a dramatic twist to global oil trade flows, a US‑sanctioned Iranian crude shipment that was initially bound for India has abruptly altered course and is now signalling China as its destination, PTI reported citing sources.

The Aframax tanker Ping Shun, built in 2002 and sanctioned by Washington last year, had earlier declared Vadinar in Gujarat as its port of call. Ship‑tracking firm Kpler has now reported that the vessel is heading towards Dongying in China, though experts caution that the destination displayed on its AIS transponder could change again mid‑voyage.

"This Iranian crude vessel, Ping Shun, which had been en route to Vadinar over the past three days, has dropped India as its declared destination and is now signalling China," the news agency quoted Sumit Ritolia, Lead Research Analyst at Kpler, as saying.

The cargo, estimated at 600,000 barrels loaded from Kharg Island in early March, would have marked India's first Iranian oil import since 2019. Indian refiners had been exploring limited purchases after Washington issued a temporary waiver on seaborne Iranian oil transactions, valid until 19 April.

Analysts suggest the sudden diversion may be linked to payment terms. Sellers are reportedly tightening conditions, moving away from the traditional 30-60 day credit window towards upfront or near‑settlement payments. The identities of the buyer and seller remain unclear.

Vadinar, home to Nayara Energy's Rosneft‑backed refinery, had been the expected recipient. "Such mid‑voyage changes are not unusual with Iranian crude, but they underscore how financial terms and counterparty risks are increasingly shaping trade flows," Ritolia noted.

India's oil ministry has reiterated that any decision on resuming Iranian imports will hinge on techno‑commercial feasibility. Historically, Iran was a key supplier, accounting for over 11 per cent of India's crude imports before sanctions halted flows in May 2019.

With nearly 95 million barrels of Iranian oil currently afloat, of which about half could potentially be sold to India, the episode highlights the uncertainty surrounding payment mechanisms. Iran remains excluded from the SWIFT network, and earlier euro‑denominated transactions via Turkish intermediaries are no longer viable.

For Indian refiners, the Ping Shun's diversion is a reminder that commercial terms are now as decisive as logistics in determining whether Iranian barrels reach Indian shores.