Close to a dozen US-sanctioned tankers are idling off Malaysia with Iranian crude, with some having been stationed in the oil-transfer hub for more than a month — possible sign of slowing logistics for the sensitive trade to China.
At least 11 tankers with the Persian Gulf state’s barrels have either come to a halt off Malaysia this week, or are moving at very low speeds, according to ship-tracking data compiled by Bloomberg. The ships, holding close to 17 million barrels, are clustered in an area east of the Malaysian peninsular, a popular spot for ship-to-ship transfers of Iranian oil.
In recent months, the movement of Iran’s crude from major export terminals such as Kharg Island to cargo-switching hotspots such as Malaysia has been more heavily scrutinized, after the US cranked up a “maximum pressure” approach on Tehran with a series of sanctions targeting ships and entities supporting the regime.
The amount of Iranian oil that’s been stuck near Malaysia and Singapore for at least a month is the highest since August, according to OilX, which is part of consultant Energy Aspects. Shipbrokers and analysts say the flotilla is bigger than usual but that the full extent of ships idling in the area is hard to pin down as vessels often turn off their digital transponders to mask their maneuvers.
OilX’s data show a growing number of vessels idling with Iranian oil for the past week, and also for the past two weeks. The numbers will be subject to revision as more hard-to-track transfers come to light.
For now, it’s not entirely clear if the oil-laden tankers off Malaysia are waiting to conduct ship-to-ship transfers, or whether they’re just awaiting buying interest from private refineries in China.
Out-at-sea cargo switches are becoming more complicated as the fleet of unsanctioned tankers available to transport Iranian crude shrinks.
Those involved in Iran’s supply chain — from shipowners to ports and oil refiners — have been on high alert after Washington’s latest move to sanction a private teapot refiner, in addition to a storage terminal and tankers.
As of late-February, more than two-thirds of the tankers that handled Iranian crude in 2024 had been blacklisted, a move that has coincided with a slowdown in the transfer of oil out at sea and prompted vessels to change their names and the flags under which they sail.
US efforts are unlikely to completely stop the oil trade between Iran and China though.
The Persian Gulf state still has spare shipping capacity. More than 20 tankers are currently anchored empty near the country’s Kharg Island loading terminal, according to Tankertrackers.com Inc., a firm that uses satellite imagery and other tools to track crude oil shipments.