New Delhi:A tanker carrying Iranian crude oil that the US has approved has changed course in the middle of its journey. Instead of going to India, it is now going to China. According to the ship tracking company Kpler, the Aframax tanker Ping Shun, which was built in 2002 and given permission by the US in 2025, is now signaling Dongying in China instead of Vadinar in Gujarat, which it had listed earlier this week.
The Automatic Identification System on the ship, which is a tracking device required on most commercial ships, does not confirm that the destination shown will be final. It can be changed at any time during transit.
"An Iranian crude vessel, Ping Shun, which had been on its way to Vadinar in Gujarat for the past three days, has changed its destination to China just before arriving in India," said Sumit Ritolia, Kpler's lead research analyst for refining and modeling.
The shipment would have been India's first purchase of Iranian crude oil since 2019. After Washington lifted some sanctions, Indian refiners were looking for ways to buy small amounts of Iranian oil at sea.
Why they changed their minds and went to ChinaRitolia said that the change seems to be related to payment terms, as sellers are making the conditions stricter and moving away from the 30- to 60-day credit windows they used to offer in favor of upfront or near-term payments.
It's still not clear who the buyer and seller are.
Nayara Energy runs a 20 million tonne per year refinery in Vadinar, which is owned by Russian oil company Rosneft.
Ritolia said, "These kinds of mid-voyage changes in destination aren't unusual in the Iranian crude trade, but they show that people are becoming more aware of financial terms and counterparty risk."
"The cargo could still get to an Indian refinery if the payment problems are fixed. This event, on the other hand, shows how important commercial terms are becoming in deciding how much Iranian crude flows to places other than China.
The oil ministry in India has said that any choice to start buying Iranian crude oil again will depend on whether it makes sense from a business and technical point of view.
India used to buy a lot of Iranian oil because it was easy to refine and the terms were good. After the US imposed stricter sanctions in May 2019, imports stopped. Middle Eastern, US, and other sources took their place.
Iranian crude oil made up 11.5% of all of India's imports at its peak. India brought in about 518,000 barrels of oil a day in 2018. This number dropped to 268,000 barrels a day between January and May 2019, when the US gave India a waiver.
Since then, there have been no imports.
Indian refiners usually bought Iran Light and Iran Heavy grades of crude oil.
Last month, the US gave a 30-day waiver that allowed the purchase of Iranian oil at sea. This was done to help lower global oil prices during tensions related to the US-Israel conflict with Iran. The waiver will end on April 19.