An Aframax tanker loaded with around 600,000 barrels of Iranian crude oil from Kharg Island, which was on its way to Vadinar (Gujarat), has now changed course and is headed to China. This would have been the first Iranian crude cargo delivered to India, after May 2019.
Amidst the West Asia conflict and subsequent oil price volatilities, the US administration temporarily lifted sanctions for over 30 days on Iranian oil on water loaded before March 20th which opened the way for India to access these once sanctioned barrels.
Global real time data and analytics provider Kpler said that the 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 signalling China.
“Per market sources, the shift 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,” said Sumit Ritolia, Kpler’s Lead Research Analyst, Refining and Modelling.
What Ritolia is saying is that the ship turned around near the finish line because the seller demanded immediate cash instead of the usual credit.
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. Ritolia 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, he added.
Vortexa, in its recent crude monthly report for March 2026, said that the waiver by the US on Iranian and Russian crude provides temporary relief. It simultaneously pointed to “payment issues” with respect to Iranian cargoes.
“The US easing of Russian oil sanctions led to a rebound in India imports of Russian crude while China continues to import at high levels. Unsanctioning Iranian crude on water could, in theory, temporarily fill the medium-sour gap if Asian refiners, particularly Indian refiners and Chinese oil majors, can resolve payment and compliance issues,” it added.
Discounts on these sanctioned barrels are narrowing or already flipping to premiums as demand rises, and the buyer pool broadens, Vortexa said.
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Published on April 3, 2026