US-sanctioned tanker carrying fist shipment of Iranian oil to India since 2019 gets rerouted to China

A US-sanctioned tanker carrying Iranian oil, the first Indian crude purchase from Tehran after 2019, has reportedly changed its course mid-way and is now heading to China. The Aframax tanker, Ping Shun, set sail to India earlier this week, carrying about 600,000 barrels of crude oil loaded from Kharg Island around March 4.

Ping Shun, which was built in 2002 and sanctioned by the US in 2025, is owned by China-based Nycity Shipmanagement and is often associated with transporting Iranian crude oil.

Ping Shun was originally signaling a planned arrival at Vadinar port in Gujarat, on Saturday, April 4. But according to ship-tracking data, Ping Shun is currently signaling Dongying in China as its destination.

There is no confirmation that the destination that the ship’s Automatic Identification System (AIS) transponder – a tracking system mandated on most commercial vessels – is indicating is the final and it may not change at any time during the 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 signaling China,” Sumit Ritolia, Lead Research Analyst, Refining and Modeling at commodity market analytical firm Kpler told PTI.

According to Ritolia, the shift in destination of Pin 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 was the actual seller and buyer of the 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.”

In mid-March, nearly three weeks into Operation Epic Fury, the US had temporarily eased sanctions on Iranian oil for a period of 30-days, allowing the sale of about 140 million barrels of crude oil and petroleum products already loaded on ships. The unusual move was taken in the wake of Iran’s retaliatory measures to the US-Israeli strikes, including closing the Strait of Hormuz and attacks on oil and gas infrastructure in the Middle East.

This sanctions waiver allowed countries, including India, which was a major buyer of Iranian crude until the US sanctions in 2018, to resume buying oil from Tehran.

India used to buy 518,000 barrels per day of Iranian oil in 2018, which slowed to 268,000 bpd between January and May 2019 when the US granted waivers to a few buyers. There have been no imports since.

It was estimated that out of the 95 million barrels of Iranian oil on vessels at sea, 51 million barrels could be sold to India, while the remaining could be sold to China and other Southeast Asian countries before the temporary window expires on April 19.

According to reports, the rerouting of Ping Shun to China could be linked to the mode of payment. Though the US issued a 30-day waiver for the sale of Iranian crude, 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.

Recently, following Iran’s decision to allow the transit of some vessels through the Strait of Hormuz, it has been reported that Tehran is setting up a ‘toll booth’ at the critical passage, where ships paying around $2 million in Chinese yuan and not USD would be allowed to pass through.