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Iran Shipment Heads to China Instead of India (Image Source: Dynamite News)
New Delhi: A big tanker carrying crude oil, Ping Shun, from Iran to India suddenly changed its route and went towards China. This tanker had reached very close to Vadinar Port in Gujarat, and it was expected that it would unload oil in India, according to data from commodity market analytics firm Kpler. But at the last moment it changed its direction, due to which this matter has come into discussion, reports Dynamite News correspondent.
This tanker was filled with approximately 6 lakh barrels of Iranian crude oil. This quantity is considered quite large and could have been significant for an import-dependent country like India.
According to experts, the biggest reason behind this decision could be payment-related problems. Earlier Iran used to give credit of 30 to 60 days to the countries buying oil, but now the conditions have become strict. Now immediate or early payment is being demanded.
An agreement could not be reached between India and Iran regarding this payment arrangement, due to which the tanker had to change its direction. It is not clear which Indian refiner was the intended buyer.
Recently, America had relaxed the sanctions on Iranian oil for some time. Its objective was to increase the supply of oil in the global market and control prices. Under this exemption, pre-loaded oil could be sold. Despite this, problems related to banking and payments still persist, which are hindering trade.
India has stopped buying oil from Iran since May 2019. The main reasons behind this were the following:
For these reasons it has not been easy for India to buy oil from Iran.
China now buys most of Iran's oil. More than 90% of Iran's total oil exports go to China. China handles alternative payment systems and logistics better. For this reason, this tanker also ultimately turned towards China.
India imports about 85-88% of its crude oil needs. In such a situation, all cargo has importance. It is clear from this incident that there is uncertainty in supply, pressure on prices may increase, and the need for alternative sources will increase further.
Experts believe that if payment-related problems are resolved, India can again buy oil from Iran in the future. However, for now this incident shows that in the oil trade, not only availability but also payment systems and international rules are equally important.
