In an interesting development, an oil tanker carrying crude oil from Iran, headed to India’s Vadinar port in Gujarat, was diverted mid-way to China. The US-sanctioned tanker Ping Shun, which had been signalling India as its destination, now shows Dongying in China as its destination, according to ship-tracking firm Kpler.
The tanker was reportedly carrying about 600,000 barrels of Iranian crude and was scheduled to arrive at Vadinar between late Thursday and early Friday. If the vessel had docked in India, it would have been India’s first Iranian crude cargo since 2019 after the US imposed sanctions on Tehran during US President Donald Trump’s first stint. It is unclear which Indian refiner ordered the Iranian crude carried by Ping Shun.
Ping Shun’s sudden course changes come as the US issued a sanction waiver to move and sell oil already loaded as of March 20, as a measure against soaring oil prices.
While the turnaround isn’t unexpected, the vessel diversion appears linked to payment-related concerns, the Times of India quoted Sumit Ritolia, Lead Research Analyst at Kpler.
Ritolia said that the trade environment has moved away from earlier credit arrangements towards upfront or near-term payments, complicating transactions. "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,” he added.
Earlier, there were reports that Trump's sanction waiver was helping Iranian vessels linked to new Supreme Leader Mojtaba Khamenei and Iranian shipping tycoon Hossein Shamkhani, to sell oil at market rates, after previously being forced to sell at a huge discount due to sanctions.
Iran is currently controlling the Strait of Hormuz, through which oil from the Gulf countries flows. The blockage is causing a global oil price rise. However, the temporary sanctions waiver has opened the door for Iran-linked vessels, which continue to pass via the Strait. The Iranian oil tycoons are taking advantage of the situation and selling their Brent crude prices.
“The US gave a hall pass to the networks we’ve been tirelessly degrading for the past decade,” said David Tannenbaum, a former official at the Treasury’s Office of Foreign Assets Control, who has studied the Shamkhani network, told Bloomberg. “This is a major shot in the arm — to the tune of hundreds of millions of dollars — at a time when the dark fleet was on the ropes,” he added.
