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Thousands of miles from the Persian Gulf, a sprawling network of tanker-to-tanker oil transfers off the coast of Malaysia and Singapore is helping Iran sustain its crude exports to China, even as the country navigates a tense ceasefire with the United States.
Analysis of satellite imagery and maritime tracking data has identified the waters roughly 100 kilometres southeast of the Malay Peninsula as the primary hub for what analysts describe as a clandestine laundering operation for Iranian crude. Dozens of ship-to-ship transfers take place there every week, involving not only Iranian vessels but a wider cast of tankers serving the shadow fleet.
"It's really the main hub," said Amir Handjani of the Washington-based Quincy Institute for Responsible Statecraft, calling the situation there "total anarchy."
Nearly 400 tankers have been sanctioned by the United States, the European Union or Britain for activities linked to Iran. The ageing vessels that make up what is widely called Iran's ghost fleet exploit opaque ownership structures, flags of convenience, absent insurance coverage and manipulated GPS data to avoid detection. Ship-to-ship transfers allow their cargoes to change hands at sea, obscuring the oil's origin before it reaches its final destination.
Iranian tankers typically load crude at Kharg Island, Iran's main offshore oil terminal in the Persian Gulf, before transiting the Strait of Hormuz and skirting the Indian subcontinent. The two- to three-week voyage takes them through the Strait of Malacca and on to anchorage areas near Singapore, where they wait for receiving vessels.
Since March 1, at least 37 Iran-linked tankers have conducted cargo transfers in the area, amounting to at least 62.3 million barrels of crude, according to data from maritime tracking firm Kpler analysed. Where final destinations were recorded, the cargoes were bound for ports in China's northern provinces of Shandong, Liaoning and Jiangsu.
The flows have continued through the conflict that began February 28. Most vessels departed the Gulf before hostilities broke out, but at least six Iranian tankers, among 26 that have crossed the Strait of Hormuz since then, have transferred a combined 10 million barrels in the Singapore area in recent weeks.
One documented chain began when the tanker Silvia 1 loaded one million barrels at Kharg Island in February, transited the Strait of Hormuz on March 3, reached the Singapore area on March 21 and transferred its cargo to the vessel Yug around March 25. The Yug subsequently received a second cargo from the Iranian tanker Seastar III on April 3. Although the Yug's current destination is unconfirmed, the Comoros-flagged tanker routinely delivers cargoes to ports in Shandong, according to Kpler and the NGO Global Fishing Watch.
Cargoes frequently pass through more than one transfer before reaching China. The Amber, carrying two million barrels out of the Gulf, offloaded to the tanker Medna on March 31, which in turn transferred the cargo to the Star Pine on April 4 before the shipment continued toward China. Two other cargoes, from the Hilda I and the Amber, were expected to arrive at the Chinese ports of Yantai in Shandong and Lianyungang in Jiangsu later this week.
Because vessels in the shadow fleet routinely switch off their automatic identification system transponders at critical moments, Kpler cannot rely on those signals alone to monitor activity. Instead, the company uses proprietary algorithms that cross-reference historical AIS data with changes in a ship's draught, a measurable indicator of whether cargo has been loaded or discharged.
The transfers have persisted despite a brief, partial US sanctions adjustment. On March 20, Washington authorised the sale of Iranian oil already stored aboard vessels before that date, a window set to expire on April 19. The measure did little to redirect trade through conventional channels.
Elisabeth Braw, an expert at the Atlantic Council, pointed to an underlying tension in US policy. Faced with what she described as "contradictory activities," simultaneously easing sanctions while blockading Iranian ports, exporters have concluded it is "safer to keep exporting Iranian oil using shadow vessels and then STS transfers than it is to try to export that oil legitimately."
The US blockade of Iranian ports, which began Monday, is expected to increase rather than diminish reliance on ship-to-ship transfers in the short term. Naveen Das, an analyst at Kpler, noted that "there's a lot of Iranian oil still on the water as floating storage," suggesting the offshore transfer system will remain active and possibly expand as producers and traders seek alternatives to port-based exports.
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