Oil, gas and Iran economic analyst
Although Malaysia refutes US claims of violating sanctions on Iranian oil trade, Iran International has obtained additional evidence suggesting that shipments to China are indeed originating from Malaysia.
Malaysia’s Prime Minister Anwar Ibrahim said on May 14 that there was "not one shred of evidence" of ship-to-ship transfers of sanctioned Iranian oil off Malaysia, amid U.S. concern that Iran was using Malaysian service providers to move its oil.
A senior US Treasury Department official said last week the United States saw Iran's capacity to move its oil as being reliant on providers in Malaysia.
Despite China officially reporting "zero" Iranian oil imports in its customs statistics, it is importing approximately 1.5 million barrels per day of Iranian oil, according to all oil trade monitoring firms. This oil is often rebranded as originating from Malaysia, Iraq, Oman, and the UAE.
Statistical evidence
Chinese customs figures show that more than 1.1 million barrels of crude oil per day (mb/d) was imported from Malaysia last year, which is six times more than in 2018, when US started imposing oil export sanctions against Iran.
The most interesting fact is that the total daily oil production of Malaysia was about 650,000 b/d last year, 40% less than its export level to China. Furthermore, Malaysia’s own custom statistics put the total exports of crude oil and petroleum products at 186,000 b/d in 2023.
Kpler, an authoritative trade intelligence firm’s tanker tracking data shows Iran shipped 670,000 barrels per day (b/d) of oil to Malaysian waters in 2023.
A senior expert at Kpler told Iran International that the volume reached 800,000 b/d in 2024, which corresponds to more than 50% of Iran’s total oil export to China.
According to several reports in the past, Malaysian and international middlemen take the Iranian oil and after ship-to-ship transfers and rebranding, export the cargoes to China as Malaysian crude oil. Companies in Malaysia even advertise their expertise and infrastructurefor ship-to-ship transfers in open waters.
Tanker seizure
Malaysia seized an Indian and a Chinese tanker due to illegal ship-to-ship operations involving Iranian oil six months ago, after the advocacy group United Against Nuclear Iran (UANI), disclosed through satellite imagery that the two vessels were bypassing US sanctions.
Claire Jungman the chief of staff at UANI and tracker of tricky oil tankers, especially ones coming out of Iran, tweeted on October 25 that her organization identified the ARTEMIS III and Panama-flagged OCEAN HERMANA conducting an illegal ship-to-ship transfer of Iranian oil in the Riau Archipelago islands.
According to the ship tracking companies, ARTEMIS III is still at Riau Archipelago islands, while OCEAN HERMANA is located at East China Sea. It is not clear why Malaysia released the Chinese tanker, but still detains the Indian vessel.
The Malaysian Maritime Enforcement Agency also reported on April 24 that a tanker was seized due to “illegal anchoring” with Iranian, Pakistani and Indian crew, without giving further information.
Malaysia’s fears and interests
China's customs statistics show that Beijing had $190 billion trade turnover with Malaysia last year. Malaysia exported nearly $103 billion to China and imported $87 billion from China.
China is Malaysia's largest trading partner; but the important point here is that the United States was also its third largest trading partner last year with $65 billion turnover, of which $46 billion was Malaysia’s exports to the US.
Iran has no significant place in Malaysia's foreign trade. The statistics from the Iranian Chamber of Commerce show that Iran exported about $247 million of goods to Malaysia and imported $613 million during last Iranian fiscal year, ending March 21.
Malaysia finds itself in a precarious position between China and the United States. Enforcing American sanctions against Iran could upset China, its largest trading partner. Conversely, ignoring these violations risks repercussions from the United States, its third-largest trading partner.
