Iran-bound crude shipment rerouted to China over payment issue? Here's what Indian govt said

An Iran-bound crude shipment headed for India has changed its course mid-voyage and begun to move towards China. The development has sparked speculation that issues in payment or sanctions-related hurdles may have forced the diversion. However, the Ministry of Petroleum and Natural Gas has stepped in to clarify that there were no payment issues and such claims are “factually incorrect.”

India had not imported Iranian oil for nearly seven years, and this shipment was expected to be the first in that period. However, the Eswatini-flagged tanker Ping Shun, which was heading to Vadinar port in Gujarat, later changed its destination to Dongying in China’s Shandong province, based on data from commodity market analytics firm Kpler.

Indian government responds

Responding to the reports, the Ministry of Petroleum and Natural Gas said there are no payment-related obstacles to importing Iranian crude. It also reiterated that Indian refiners source oil from a wide and diverse range of global suppliers. "India imports crude oil from 40 countries, with companies having full flexibility to source oil from different sources and geographies based on commercial considerations," the statement read.

The ministry added that such mid-voyage route changes are common in the oil trade, noting that cargo destinations are often flexible and can be altered due to commercial or operational considerations. "Claims on vessel diversion ignore how the oil trade works. Bills of Lading often carry indicative discharge ports, destinations and on-sea cargoes can change destinations mid-voyage based on trade optimisation and operational flexibility," the ministry said.

In addition, authorities indicated that rerouting can be based on multiple factors, and it is not only a sign of supply disruption or diplomatic rift. The ministry also highlighted that energy trade with Iran is ongoing, noting that an LPG vessel, Sea Bird, carrying about 44,000 tonnes, docked at Mangalore on April 2 and is currently unloading its cargo.

Amid supply concerns linked to tensions in West Asia, the government reassured that India’s energy requirements remain fully secure and adequately met. "It is reiterated that India's crude oil requirements remain fully secured for the coming months."

"Amid Middle East supply disruptions, Indian refiners have secured their crude oil requirements, including from Iran, and there is no payment hurdle for Iranian crude imports, contrary to the rumours being circulated," the ministry further said.