Malaysia Says It Has Limited Ability to Halt Iranian Oil Transfers Near Its Waters

Malaysia’s maritime agency has stated it possesses limited ability to stop Iranian-linked tankers from conducting ship-to-ship oil transfers off its coast. The transfers occur in international waters roughly 70 kilometers from Malaysia’s southern Johor state, allowing Iran to continue oil exports while evading sanctions.

Malaysian Maritime Enforcement Agency Director-General Mohamad Rosli Abdullah said the operations often take place beyond Malaysia’s jurisdiction. Vessels involved, commonly referred to as the shadow fleet, frequently switch off tracking systems, use false identities, operate at night and employ complex ownership structures to avoid detection.

“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. The area lies along a major maritime trade route in the South China Sea between Iran and China, which purchases about 90 percent of Iranian oil.

The transfers have continued even after a U.S. blockade of Iranian ports began in mid-April. As of Tuesday, two dozen Iranian-linked tankers tracked by an advocacy group remained anchored or loitering near the Eastern Outer Port Limits used for the transfers, though it was unclear how many had arrived before the blockade.

The practice has persisted for years, providing buyers with plausible deniability about the oil’s origin.

Malaysia discourages unsanctioned ship-to-ship transfers outside designated areas where they can be supervised. Such operations increase spill risks because they involve aging vessels and occur far from ports where accidents could be contained more easily.

The location borders the Riau Archipelago, which belongs to Indonesian territory. Indonesia’s Foreign Ministry said authorities were 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.

Malaysian authorities earlier this year seized two vessels involved in the unauthorized transfer of 2 million barrels of crude oil in Malaysian territorial waters. Those vessels were later released on bond. Mohamad Rosli noted that one of the seized vessels was observed this month conducting another ship-to-ship transfer of suspected Iranian oil off Johor.

Malaysian authorities said they will continue to strengthen monitoring and enhance cooperation with relevant agencies to safeguard the nation’s maritime domain. Neither the Iranian Embassy in Kuala Lumpur nor the U.S. State Department responded immediately to requests for comment.