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The Star
a day ago
- Business
- The Star
Oil tankers going dark off Malaysia as Iran trade draws scrutiny
SOUTH-EAST ASIA (Bloomberg): Tankers involved in a vital hub of the Iran-to-China oil trade are disappearing from digital tracking systems, as the threat of US sanctions forces tactical changes to keep crude flowing. Over recent months, more vessels have started switching off their transponders as they near waters off eastern Malaysia, a hotspot for the transfer of Iranian oil from one to ship to another for transport to China. Previously, systems were rarely disabled, signaling when tankers anchored next to each other. While the tactic of going dark is not new, it's being used more regularly off Malaysia to avoid scrutiny. The White House says the Iranian oil trade generates revenue that supports Tehran-backed militia groups including Hamas, and has sought to hobble flows through sanctions on ships, ports and refiners. "Ship-to-ship transfers have been used to mask the origin of those cargoes,' said Muyu Xu, a senior crude oil analyst at Kpler in Singapore. "Now they're switching signals off for longer, so that it's now even harder trace those flows back to the source, which is Iran.' A recent example is the Vani, an unsanctioned very large crude carrier that was built in 2004 and has the capacity to carry 2 million barrels. The empty vessel signaled its position off eastern Malaysia on May 15, before going dark then and reappearing fully laden in the region five days later, according to ship-tracking compiled by Bloomberg. While Vani was missing from digital tracking systems, the tanker conducted a ship-to-ship transfer on May 18 with the Nora, a US-sanctioned vessel that had collected Iranian crude from the Kharg Island export terminal, according to Kpler and Vortexa. Vani is now signaling Qingdao in China as its destination, data from the two analytics companies show. Avani Lines Inc., based in the Marshall Islands and the registered owner of Vani, doesn't have a listed phone number or email address for contact on the Maritime Portal run by S&P Global Inc. China's independent refiners are the biggest buyers of Iranian crude, attracted to the discounted barrels because they help buffer typically razor thin margins. While official Chinese data shows the nation hasn't imported oil from the OPEC producer since 2022, third-party figures signal robust flows. China imported around 1.46 million barrels a day from Iran last month, down from a five-month high in March, according to Kpler. Flows started to slip late last year but have since recovered. Other methods being used to keep the Iran-to-China trade in business include the use of zombie ships - vessels that take on the identities of scrapped tankers to appear legitimate. In April, at least six ship-to-ship transfers off Malaysia were conducted with vessels that had disabled their transponders, including one with the Celine, a US-sanctioned ship, that had loaded Iranian oil from Kharg Island, according to Kpler. In the same month last year, only one tanker went dark. Ships can be identified conducting oil transfers by analyzing satellite imagery, but the process is labor intensive and picture quality depends on the weather. It requires matching tankers to photos of vessels with known identities, a method that needs more time and can be prone to human error. "It's getting more and more difficult to track those sanctioned flows,' Emma Li, senior market analyst at intelligence firm Vortexa Ltd., said during a client presentation in Singapore in early April attended by Bloomberg News. -- ©2025 Bloomberg L.P.
Malaysian Reserve
2 days ago
- Business
- Malaysian Reserve
Oil tankers going dark off Malaysia as Iran trade draws scrutiny
TANKERS involved in a vital hub of the Iran-to-China oil trade are disappearing from digital tracking systems, as the threat of US sanctions forces tactical changes to keep crude flowing. Over recent months, more vessels have started switching off their transponders as they near waters off eastern Malaysia, a hotspot for the transfer of Iranian oil from one to ship to another for transport to China. Previously, systems were rarely disabled, signaling when tankers anchored next to each other. While the tactic of going dark is not new, it's being used more regularly off Malaysia to avoid scrutiny. The White House says the Iranian oil trade generates revenue that supports Tehran-backed militia groups including Hamas, and has sought to hobble flows through sanctions on ships, ports and refiners. 'Ship-to-ship transfers have been used to mask the origin of those cargoes,' said Muyu Xu, a senior crude oil analyst at Kpler in Singapore. 'Now they're switching signals off for longer, so that it's now even harder trace those flows back to the source, which is Iran.' A recent example is the Vani, an unsanctioned very large crude carrier that was built in 2004 and has the capacity to carry 2 million barrels. The empty vessel signaled its position off eastern Malaysia on May 15, before going dark then and reappearing fully laden in the region five days later, according to ship-tracking compiled by Bloomberg. While Vani was missing from digital tracking systems, the tanker conducted a ship-to-ship transfer on May 18 with the Nora, a US-sanctioned vessel that had collected Iranian crude from the Kharg Island export terminal, according to Kpler and Vortexa. Vani is now signaling Qingdao in China as its destination, data from the two analytics companies show. Avani Lines Inc., based in the Marshall Islands and the registered owner of Vani, doesn't have a listed phone number or email address for contact on the Maritime Portal run by S&P Global Inc. China's independent refiners are the biggest buyers of Iranian crude, attracted to the discounted barrels because they help buffer typically razor thin margins. While official Chinese data shows the nation hasn't imported oil from the OPEC producer since 2022, third-party figures signal robust flows. China imported around 1.46 million barrels a day from Iran last month, down from a five-month high in March, according to Kpler. Flows started to slip late last year but have since recovered. Other methods being used to keep the Iran-to-China trade in business include the use of zombie ships — vessels that take on the identities of scrapped tankers to appear legitimate. In April, at least six ship-to-ship transfers off Malaysia were conducted with vessels that had disabled their transponders, including one with the Celine, a US-sanctioned ship, that had loaded Iranian oil from Kharg Island, according to Kpler. In the same month last year, only one tanker went dark. Ships can be identified conducting oil transfers by analyzing satellite imagery, but the process is labor intensive and picture quality depends on the weather. It requires matching tankers to photos of vessels with known identities, a method that needs more time and can be prone to human error. 'It's getting more and more difficult to track those sanctioned flows,' Emma Li, senior market analyst at intelligence firm Vortexa Ltd., said during a client presentation in Singapore in early April attended by Bloomberg News. –BLOOMBERG
Business Times
08-05-2025
- Business
- Business Times
Zombie oil supertanker in China points to Iran trade workarounds
[HONG KONG] After buckling under pressure from Beijing and Washington, the clandestine supply chain that carries Iranian crude to China is finding new workarounds. A tanker identifying itself as Global discharged about two million barrels of Iranian oil at a port managed by a Chinese provincial government in late April, ship-tracking data show. However, the vessel was actually a very large crude carrier called Gather View that had been sanctioned by the US and took over the identity of a previously scrapped ship to evade a crackdown on the trade. It's the first time a so-called zombie ship was observed entering a government-run port in Shandong since the province, home to the world's biggest buyers of Iranian crude, issued a directive forbidding sanctioned tankers in January. The move highlights the lengths Tehran and the teapots – independent Chinese refiners often working on extremely thin margins – are going to keep the trade alive. The sale of Iranian crude to China is crucial to Tehran and a lifeline for Shandong's private processors. In the past, it's been facilitated by ship-to-ship transfers in the waters off Malaysia to avoid scrutiny and mask the origins of the cargoes. A crackdown by the US – through successive rounds of sanctions – and China since January has now snarled the supply chain. Traders have since rushed to find privately run berths in China to receive sensitive cargoes, as well as sourcing the smaller tankers they are able to accept. The delivery of two million barrels on a sanctioned VLCC to a government-run port goes against that trend. It's a risky gambit: if discovered by authorities, the entire cargo worth about $120 million at the time could have been impounded. Furthermore, the port could have hit by Washington's secondary sanctions – as happened in March to a terminal in southern China that facilitated the trade. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Iran needs to be creative because the pace for them to find new tankers cannot really match the pace of US sanctions,' said Muyu Xu, senior crude oil analyst at analytics firm Kpler in Singapore. 'So that's why we're seeing them come up with this tactic.' Zombie ships, where a vessel signals itself as an already scrapped tanker, are increasingly being used to avoid sanctions, as law enforcement officials become more familiar with the usual tactics used by the dark fleet to deliver sensitive cargoes. At least four such vessels have featured in the Venezuelan oil trade, while late last year one was observed discharging at two ports in China. The Gather View – identifying as Global – called at a berth in Dongjiakou belonging to Qingdao Port, which in turn is part of Shandong Port Group, on Apr 25, according to data from Kpler and Bloomberg. It appears to have carried out a similar run in March. Shandong Port Group did not respond to an email seeking comment. There's no clear evidence of willful wrongdoing in port inspection procedures but 'there may be some loophole in terms of scrutiny', said Kpler's Xu. The Gather View was sanctioned by the Treasury Department in December under its former name, MS Angia, for being involved in the Iranian oil trade. It's flying the flag of San Marino, took its cargo from another tanker owned by the National Iranian Oil Company through an at-sea transfer near Malaysia, and has since returned to that area, data show. The original Global – a floating storage unit for crude – was sent to the breakers in Bangladesh in late 2021. That vessel was not sanctioned by any government. Smaller cargoes on sanctioned tankers are still reaching China's private ports, including a terminal at Dongying recently spun off from Shandong Port Group that has become a go-to spot for sensitive shipments. However, those workarounds aren't as cost-efficient as those done through official ports that can receive larger VLCCs. BLOOMBERG
Zawya
21-03-2025
- Business
- Zawya
New US sanctions to slow but not stop China's Iranian oil imports, traders say
Iranian oil shipments into China are set to fall in the near-term after new U.S. sanctions on a refiner and tankers, driving up shipping costs, but traders said they expect buyers to find workarounds to keep at least some volumes flowing. Washington on Thursday imposed new sanctions on entities including Shouguang Luqing Petrochemical, a "teapot," or independent refinery in east China's Shandong province, and vessels that supplied oil to such plants in China, the top buyers of Iranian crude. It was the fourth round of sanctions on Iran's oil sales since President Donald Trump's February call for "maximum pressure" on Tehran, including efforts to drive its crude exports to zero. Iranian oil flows to China had already dropped due to rising freight costs as earlier sanctions hit shipping capacity, said traders, including three directly involved in the business. A Chinese trading executive involved in Iranian oil business said the latest sanctions did not come as a surprise and expects that more plants or terminals could be targeted. "But once companies re-adjust their business structures, imports would continue," said the executive, referring to measures such as changing entities for oil payments. Still, imports may be curbed as the sanctions give larger private refiners pause, said a second Chinese trader. Freight costs for a Very Large Crude Carrier, or VLCC, sailing from waters near Malaysia, a key transshipment point for Iranian oil, to China's refining hub Shandong have more than doubled since late 2024 to $3-$4 per barrel, the first executive added. China's Iranian oil imports recovered in February to 1.43 million bpd, from 898,000 bpd in January, data from analytics firm Kpler showed. About 33 million barrels have been delivered this month, with volumes forecast to reach 1.7 million bpd before the latest sanctions, senior Kpler analyst Muyu Xu said, adding that discharge volumes for the rest of March could decline sharply due to the sanctions. Most Iranian oil shipments to China, which make up over 10% of its crude imports, are rebranded by traders as sourced from Malaysia. "This marks a clear escalation in sanctions policy, though not as severe as if a Chinese port had been designated," said Brian Leisen, commodities strategist at RBC Capital. 'INDISCRIMINATE AND ILLEGAL' China, which defends its trade with Iran as legitimate, on Friday reiterated its opposition to "indiscriminate and illegal" unilateral sanctions and pledged to protect the rights of Chinese enterprises, which one trader said buyers would take comfort from. Luqing, which operates a 160,000 bpd refinery, is among the larger regular buyers of discounted Iranian oil, according to traders. It is the second teapot sanctioned by the U.S. after Haiyou Petrochemical was designated in 2022. A person answering the phone at Luqing did not have immediate comment on Friday. The company did not immediately respond to an email seeking comment. Oil from Iran, Venezuela and Russia shunned by many Western buyers has saved Chinese refineries billions of dollars in recent years as flagging economic growth and stagnant fuel demand depress margins. One trader dealing in Iranian oil said a teapot operator seemed unfazed by Thursday's announcement. "Our regular client appeared nonchalant when I shared the sanction document translated into Chinese late last night and carried on asking for the latest Iranian oil quotes," the trader said. (Reporting by Chen Aizhu and Florence Tan Editing by Tony Munroe, William Maclean)
Al Arabiya
21-03-2025
- Business
- Al Arabiya
New US sanctions to slow but not stop China's Iranian oil imports, traders say
Iranian oil shipments into China are set to fall in the near-term after new US sanctions on a refiner and tankers, driving up shipping costs, but traders said they expect buyers to find workarounds to keep at least some volumes flowing. Washington on Thursday imposed new sanctions on entities including Shouguang Luqing Petrochemical, a 'teapot,' or independent refinery in east China's Shandong province, and vessels that supplied oil to such plants in China, the top buyers of Iranian crude. It was the fourth round of sanctions on Iran's oil sales since President Donald Trump's February call for 'maximum pressure' on Tehran, including efforts to drive its crude exports to zero. Iranian oil flows to China had already dropped due to rising freight costs as earlier sanctions hit shipping capacity, said traders, including three directly involved in the business. A Chinese trading executive involved in Iranian oil business said the latest sanctions did not come as a surprise and expects that more plants or terminals could be targeted. 'But once companies re-adjust their business structures, imports would continue,' said the executive, referring to measures such as changing entities for oil payments. Still, imports may be curbed as the sanctions give larger private refiners pause, said a second Chinese trader. Freight costs for a Very Large Crude Carrier, or VLCC, sailing from waters near Malaysia, a key transshipment point for Iranian oil, to China's refining hub Shandong have more than doubled since late 2024 to $3-$4 per barrel, the first executive added. China's Iranian oil imports recovered in February to 1.43 million bpd, from 898,000 bpd in January, data from analytics firm Kpler showed. About 33 million barrels have been delivered this month, with volumes forecast to reach 1.7 million bpd before the latest sanctions, senior Kpler analyst Muyu Xu said, adding that discharge volumes for the rest of March could decline sharply due to the sanctions. Most Iranian oil shipments to China, which make up over 10% of its crude imports, are rebranded by traders as sourced from Malaysia. 'This marks a clear escalation in sanctions policy, though not as severe as if a Chinese port had been designated,' said Brian Leisen, commodities strategist at RBC Capital. 'Indiscriminate and illegal' China, which defends its trade with Iran as legitimate, on Friday reiterated its opposition to 'indiscriminate and illegal' unilateral sanctions and pledged to protect the rights of Chinese enterprises, which one trader said buyers would take comfort from. Luqing, which operates a 160,000 bpd refinery, is among the larger regular buyers of discounted Iranian oil, according to traders. It is the second teapot sanctioned by the U.S. after Haiyou Petrochemical was designated in 2022. A person answering the phone at Luqing did not have immediate comment on Friday. The company did not immediately respond to an email seeking comment. Oil from Iran, Venezuela and Russia shunned by many Western buyers has saved Chinese refineries billions of dollars in recent years as flagging economic growth and stagnant fuel demand depress margins. One trader dealing in Iranian oil said a teapot operator seemed unfazed by Thursday's announcement. 'Our regular client appeared nonchalant when I shared the sanction document translated into Chinese late last night and carried on asking for the latest Iranian oil quotes,' the trader said.
