A single tanker quietly sailing through the sea may bring new life to an old trade route that has been on hold for years.
Approximately 600,000 barrels of Iranian crude oil will likely be delivered by vessel Ping Shun as it travels to the Gujarat port of Vadinar in India – marking the first time since 2019 that any Iranian oil has been shipped into India.
The timing of this delivery could not be better for countries around the world that have suffered supply chain disruptions as a result of conflict and are now looking for new crude oil suppliers.
For the country of India, which imports most of its crude oil, the shipment of crude oil from Ping Shun would be a temporary source of relief from current high prices.
The Ship’s Journey From Iran
Data indicates that the Ping Shun tanker has left Iran’s Kharg Island oil terminal and is on its way to the western coast of India (Gujarat). Kharg Island serves as a significant export location for Iran’s oil. This area is also known to have been under attack during the current struggle in Iran.
This tanker is also set to deliver crude oil to a refinery in Vadinar, Gujarat (owned by Nayara Energy), which will then allow the crude oil to be transported to refineries throughout India (for instance, the refineries owned by Bharat Petroleum Corporation Limited in Bina, Madhya Pradesh).
However, despite the expected final destination for this tanker, analysts caution that it could change before reaching Vadinar (as ships transporting oil that have been sanctioned typically edit their destination – the port they will use to offload – before reaching port, to avoid being closely monitored).
A Temporary Window From Washington
India’s possible buying back of Iranian crude oil is likely due to a 30-day (30-day) exemption (waiver) from US sanctions that was granted in 30 days, effective up to 4/19/23 (the date remaining) and applies only to the vessel (cargo) loaded before the waiver announcement.
The waiver was granted after huge disruptions in global oil supply due to the conflict in the Gulf area and the effect that those disruptions had on energy supplies passing through the Strait of Hormuz.
Before the war in the region, 20-25% of the world’s crude oil supply was shipped through the Strait of Hormuz.
The new waiver available to India and certain other countries now allows for a very limited time for Iranian crude to be picked up from existing vessels that are at sea now (waiting for discharge).
A Trade Route That Once Flourished
During the late 2010s through the early 2010s, Iran was a key supplier of oil to India. At one time, Iranian oil was responsible for over 16% of India’s total crude oil imports.
After the signing of the Joint Comprehensive Plan of Action in 2015 by Iran and the US, the two countries’ economic and political relations improved, allowing for the export of millions of barrels of Iranian oil to India on a daily basis.
In 2017, Iran had become India’s third-largest crude oil supplier. However, in 2018, the US exited the JCPOA and imposed new sanctions on Iran, causing a fundamental change in how Iranian oil was supplied to India.
Imports Stopped in 2019
India gradually reduced its Iranian oil purchases after sanctions returned.
A temporary waiver allowed limited imports for a short period. But once that exemption expired in May 2019, India halted official purchases of Iranian crude entirely.
The final shipments arrived just days before the sanctions deadline.
Since then, India has relied on other suppliers such as Iraq, Saudi Arabia, and Russia to meet its energy needs.
If the Ping Shun cargo reaches Gujarat, it would mark the first Iranian crude delivery to India in nearly seven years.
Also Read: ‘Be Ready for Tough Times’: PM Modi Warns of Long Impact from US-Iran War
Why Iranian Oil Remains Attractive
Buyers in Asia are still attracted to Iranian crude oil, even after enduring stiff sanctions placed on Iran’s oil industry. One of the reasons for this interest is the wide range of crude oil types produced in Iran, from very light condensate to heavier grades that refineries across Asia can process. Additionally, the pricing of Iranian crude oil is attractive in comparison to other producers. Typically, Iranian crude oil is priced $3-$9 below the benchmark price of Brent crude oil. Given that crude oil prices have recently exceeded $100 per barrel, discounts of this magnitude make Iranian crude oil increasingly attractive to buyers. Lastly, the production costs to produce a barrel of crude oil in Iran are low, often costing around $10. This allows Iran the flexibility to set competitive prices in the global marketplace.
Payment Challenges Remain
Even if India receives the cargo, financial arrangements remain unclear.
Iran is still excluded from the global SWIFT banking system, which complicates international payments in dollars or euros.
Before sanctions tightened, India paid for Iranian oil partly in rupees deposited in Indian banks. Tehran then used those funds to purchase Indian goods such as food and medicines.
Whether a similar mechanism will be used again is still uncertain.
A Small Shipment With Big Signals
The Ping Shun tanker may carry only one cargo. Yet its arrival could signal something larger.
It reflects how global energy politics continue to shift during times of conflict and economic pressure.
For India, the shipment could offer short-term supply relief. For Iran, it could represent a rare opportunity to sell oil despite ongoing sanctions.
Whether this moment becomes a one-off event or the start of renewed energy trade remains to be seen.
But for now, all eyes are on a single ship moving steadily towards the coast of Gujarat.
