Malaysia's maritime agency has acknowledged its limited ability to prevent Iranian-linked tankers from transferring oil to other vessels off its coast, a practice that enables Iran to circumvent international sanctions and has attracted increasing criticism.
Ship-to-Ship Transfers in International Waters
The United Against Nuclear Iran (UANI), a U.S.-based advocacy group, reports that 42 ship-to-ship transfers of Iranian oil have occurred approximately 70 kilometres (45 miles) off Malaysia's southern Johor state since February 28, when the United States and Israel launched attacks on Iran, sparking a regional conflict. UANI utilised satellite imagery to monitor these operations.
Shipping industry organisations and UANI have condemned the transfers, accusing Malaysia of lax enforcement. However, Malaysian Maritime Enforcement Agency (MMEA) Director-General Mohamad Rosli Abdullah contends that these activities often take place in international waters beyond Malaysia's jurisdiction. He noted that vessels involved in these operations, commonly referred to as the "shadow fleet," frequently evade detection by disabling tracking systems, employing false identities, operating at night, and exploiting complex ownership structures.
"The issues raised do not align with the actual situation on the ground and do not reflect the operational realities of maritime enforcement conducted by the MMEA," Mohamad Rosli told the Associated Press.
Strategic Location and Persistent Activity
U.S. officials have previously highlighted that Iranian oil exports heavily depend on service providers and ship-to-ship transfers near Malaysian waters. The area, known as the Eastern Outer Port Limits (EOPL) in the South China Sea, lies along one of the world's busiest maritime trade routes, roughly halfway between Iran and China, which purchases about 90% of Iranian crude oil.
Clandestine high-seas transfers from Iranian-linked tankers have persisted for years, enabling Tehran to sell its crude while providing buyers with plausible deniability regarding the oil's origin. Although not illegal, Malaysia discourages unsanctioned transfers outside designated areas where operations can be supervised, as they significantly increase the risk of oil spills, involve ageing vessels, and are conducted far from ports where accidents could be more easily contained.
Neither the Iranian Embassy in Kuala Lumpur nor the U.S. State Department immediately responded to requests for comment.
Continued Iranian Oil Flow Despite Blockade
Despite a U.S. blockade of Iranian ports that began in mid-April, UANI has tracked Iranian-linked tankers still operating, though it remains unclear how many are successfully running the blockade. As of Tuesday, two dozen Iranian-linked tankers monitored by UANI were anchored or loitering near the EOPL area off Johor, although it was uncertain how many had sailed before the blockade was imposed.
"It's business as usual," said Charlie Brown, senior adviser to UANI. "Because of Malaysia's inaction, it is facilitating this business model by Iran and China and dark fleet actors," he warned, adding that Malaysia is becoming "a facilitator rather than merely a transit point" for illicit activity.
UANI argues that Malaysia could enforce environmental regulations requiring advance notification of ship-to-ship transfers, prevent Malaysian companies from supporting such vessels, and mandate adequate insurance against accidents and oil spills. However, Mohamad Rosli maintains that Malaysia's options are limited since these "activities are typically conducted outside Malaysian territorial waters, particularly in areas located near maritime boundaries or international shipping routes."
He emphasised that enforcement is carried out strictly under Malaysian law and relevant international conventions, and that authorities have "never compromised nor provided any special treatment or privileges to any country."
Indonesia Reviews Border Oil Transfers
Although the area where transfers occur is widely considered part of Malaysia's broader economic zone, it borders the Riau Archipelago, which belongs to Indonesia. Indonesia's Foreign Ministry stated that authorities are reviewing the situation to determine the legality of the activity.
"Indonesia does not permit its territory or maritime zones to be used for unlawful activities," said Foreign Ministry spokesperson Yvonne Mewengkang. "At the same time, Indonesia continues to uphold legitimate navigational rights under UNCLOS (the United Nations Convention on the Law of the Sea), including the right of innocent passage, transit passage, and the right of passage through Indonesian maritime zones."
Mohamad Rosli noted that Malaysia earlier this year seized two vessels—one stateless and the other flagged Cameroon—involved in transferring 2 million barrels of crude oil in Malaysian territorial waters. The vessels were later released on bond for conducting unauthorised oil transfers. Brown said one of these vessels was spotted earlier this month conducting a ship-to-ship transfer of suspected Iranian oil off Johor.
Malaysian authorities "will continue to strengthen monitoring and enhance strategic cooperation with relevant agencies to ensure that the nation's maritime domain's safety and sovereignty are consistently safeguarded," Mohamad Rosli concluded.
