Iranian Oil Tanker Diverts Course from India to China Over Payment Concerns

— A US-sanctioned tanker carrying Iranian crude oil has abruptly changed its destination from India to China, just as it approached the Indian coast, highlighting persistent payment and sanctions-related challenges in global oil trade.
The Aframax vessel Ping Shun (built in 2002, Eswatini-flagged), which was sanctioned by the United States in 2025, had been signalling Vadinar port in Gujarat as its destination for the past three days. It was carrying approximately 600,000 barrels of Iranian crude loaded from Kharg Island in early March. Had it docked in India, this would have marked the country’s first Iranian crude import in nearly seven years.
However, as the tanker neared the Indian coastline, it took a sharp turn and is now signalling Dongying in China’s Shandong province as its new destination, according to ship-tracking data from commodity analytics firm Kpler.
Lead Research Analyst Sumit Ritolia at Kpler stated that the rerouting appears linked to payment-related issues. Iranian sellers are tightening terms, moving away from the earlier 30-60 day credit window toward upfront or near-term settlement, complicating transactions amid banking restrictions and sanctions.
This development comes despite a temporary US sanctions waiver (expiring April 19) aimed at easing global oil supply pressures amid the ongoing Middle East conflict. Payment hurdles, insurance risks, and counterparty concerns continue to pose significant barriers for Indian refiners.
India has not issued any official statement on the matter so far. China, already the largest buyer of Iranian oil, is now set to receive the cargo instead.
The incident underscores how financial and sanctions complexities are increasingly dictating oil trade flows, even as geopolitical tensions disrupt traditional supply routes.