Waters off Malaysia’s southern Johor state have become a critical hub for clandestine transfers of Iranian oil, with Malaysian authorities acknowledging that foreign-linked tankers are exploiting “jurisdictional gaps” in busy international shipping lanes to evade enforcement action. According to the Associated Press, the operations centre on the Eastern Outer Port Limits (EOPL) in the South China Sea, an area roughly 70 kilometres off Johor that sits along one of the world’s busiest maritime corridors between the Middle East and East Asia.&nbsp;The Malaysian Maritime Enforcement Agency (MMEA) said that many of the ship-to-ship oil transfers are carried out beyond Malaysia’s territorial waters and outside effective radar coverage. “The selection of such locations is intended to exploit jurisdictional gaps and limit direct enforcement action by local authorities,” MMEA Director-General Mohamad Rosli Abdullah told AP.&nbsp;ALSO READ: <a href="https://www.wionews.com/photos/xi-trump-summit-us-president-reaches-china-for-high-stakes-talks-date-venue-key-facts-and-what-s-at-stake-1778665281416">Xi-Trump summit: US president reaches China for high-stakes talks — Date, venue, key facts and what’s at stake</a>&nbsp;The activity involves Iran-linked vessels commonly described as a ‘shadow fleet’, ageing tankers operating with disabled tracking systems, altered identities and opaque ownership structures to disguise the origin of crude oil shipments, much of which is believed to be destined for China. Industry observers note that China purchases about 90 per cent of Iran’s oil exports, despite longstanding US sanctions targeting Tehran’s energy trade.&nbsp;<h3>Allegations of weak enforcement rejected by Malaysian authorities</h3><h3>&nbsp;</h3>US-based advocacy organisation United Against Nuclear Iran (UANI) claims the EOPL area has seen 42 ship-to-ship transfers involving Iranian oil since February 28, based on satellite imagery monitoring. Senior UANI adviser Charlie Brown accused Malaysia of enabling the trade through insufficient enforcement. “Because of Malaysia’s inaction, it is facilitating this business model by Iran and China and dark fleet actors,” he told AP, adding that the country risked becoming “a facilitator rather than merely a transit point”.&nbsp;Malaysian authorities rejected the criticism, insisting enforcement is conducted strictly under domestic law and international maritime conventions. Rosli said the allegations “do not align with the actual situation on the ground” and pointed to limited real-time intelligence sharing between agencies as a significant obstacle.&nbsp;ALSO READ: <a href="https://www.wionews.com/world/iran-conflict-triggers-ink-shortage-as-japanese-snack-giant-switches-to-black-and-white-packaging-1778658515642">Iran conflict triggers ink shortage as Japanese snack giant switches to black-and-white packaging</a>&nbsp;Malaysia discourages unsanctioned offshore transfers because they heighten the risk of oil spills, particularly when conducted using ageing vessels far from port facilities.&nbsp;<h3>Indonesia reviews legality as shadow fleet activity continues</h3><h3>&nbsp;</h3>The issue has also drawn scrutiny from neighbouring Indonesia, whose maritime territory borders the transfer zone near the Riau Archipelago. Indonesia’s Foreign Ministry said authorities were reviewing the legality of activities in the area. Spokesperson Yvonne Mewengkang told AP: “Indonesia does not permit its territory or maritime zones to be used for unlawful activities.”&nbsp;ALSO READ: <a href="https://www.wionews.com/photos/why-does-china-hold-stronger-cards-as-trump-heads-to-beijing-for-high-stakes-summit-1778668449710">Xi-Trump summit: Why does China hold stronger cards as Trump heads to Beijing for high-stakes talks?</a>&nbsp;Despite increased scrutiny and a US blockade of Iranian ports introduced in mid-April, UANI says Iranian-linked tankers continue operating near the EOPL. “It’s business as usual,” Brown said.&nbsp;Earlier this year, Malaysian authorities seized two vessels involved in the transfer of two million barrels of crude oil within Malaysian territorial waters. One vessel was stateless, while the other sailed under a Cameroon flag. Both were later released on bond after being detained for conducting unauthorised oil transfers.

The Malaysian Maritime Enforcement Agency (MMEA) said that many of the ship-to-ship oil transfers are carried out beyond Malaysia’s territorial waters and outside effective radar coverage. 

Waters off Malaysia’s southern Johor state have become a critical hub for clandestine transfers of Iranian oil, with Malaysian authorities acknowledging that foreign-linked tankers are exploiting “jurisdictional gaps” in busy international shipping lanes to evade enforcement action. According to the Associated Press, the operations centre on the Eastern Outer Port Limits (EOPL) in the South China Sea, an area roughly 70 kilometres off Johor that sits along one of the world’s busiest maritime corridors between the Middle East and East Asia. The Malaysian Maritime Enforcement Agency (MMEA) said that many of the ship-to-ship oil transfers are carried out beyond Malaysia’s territorial waters and outside effective radar coverage. “The selection of such locations is intended to exploit jurisdictional gaps and limit direct enforcement action by local authorities,” MMEA Director-General Mohamad Rosli Abdullah told AP. ALSO READ: Xi-Trump summit: US president reaches China for high-stakes talks — Date, venue, key facts and what’s at stake The activity involves Iran-linked vessels commonly described as a ‘shadow fleet’, ageing tankers operating with disabled tracking systems, altered identities and opaque ownership structures to disguise the origin of crude oil shipments, much of which is believed to be destined for China. Industry observers note that China purchases about 90 per cent of Iran’s oil exports, despite longstanding US sanctions targeting Tehran’s energy trade. Allegations of weak enforcement rejected by Malaysian authorities US-based advocacy organisation United Against Nuclear Iran (UANI) claims the EOPL area has seen 42 ship-to-ship transfers involving Iranian oil since February 28, based on satellite imagery monitoring. Senior UANI adviser Charlie Brown accused Malaysia of enabling the trade through insufficient enforcement. “Because of Malaysia’s inaction, it is facilitating this business model by Iran and China and dark fleet actors,” he told AP, adding that the country risked becoming “a facilitator rather than merely a transit point”. Malaysian authorities rejected the criticism, insisting enforcement is conducted strictly under domestic law and international maritime conventions. Rosli said the allegations “do not align with the actual situation on the ground” and pointed to limited real-time intelligence sharing between agencies as a significant obstacle. ALSO READ: Iran conflict triggers ink shortage as Japanese snack giant switches to black-and-white packaging Malaysia discourages unsanctioned offshore transfers because they heighten the risk of oil spills, particularly when conducted using ageing vessels far from port facilities. Indonesia reviews legality as shadow fleet activity continues The issue has also drawn scrutiny from neighbouring Indonesia, whose maritime territory borders the transfer zone near the Riau Archipelago. Indonesia’s Foreign Ministry said authorities were reviewing the legality of activities in the area. Spokesperson Yvonne Mewengkang told AP: “Indonesia does not permit its territory or maritime zones to be used for unlawful activities.” ALSO READ: Xi-Trump summit: Why does China hold stronger cards as Trump heads to Beijing for high-stakes talks? Despite increased scrutiny and a US blockade of Iranian ports introduced in mid-April, UANI says Iranian-linked tankers continue operating near the EOPL. “It’s business as usual,” Brown said. Earlier this year, Malaysian authorities seized two vessels involved in the transfer of two million barrels of crude oil within Malaysian territorial waters. One vessel was stateless, while the other sailed under a Cameroon flag. Both were later released on bond after being detained for conducting unauthorised oil transfers.

The Malaysian Maritime Enforcement Agency (MMEA) said that many of the ship-to-ship oil transfers are carried out beyond Malaysia’s territorial waters and outside effective radar coverage.&nbsp;

Iran-linked 'shadow fleet' uses ship-to-ship transfers near Malaysia to bypass oil sanctions

The Trump administration has announced that it will not renew the 30-day temporary sanction waiver for the Iranian oil tankers stranded at sea, which is set to expire on April 19, 2026 (Sunday). The US Treasury Department, in a social media post on the platform X, announced that it will be moving with “economic fury”. It also announced that the administration is considering further secondary sanctions against any country that is considering support for Iran's activities. The administration has previously announced a similar waiver on Russian oil, which it quietly allowed to expire without renewal.&nbsp;"Financial institutions should be on notice that the department is leveraging the full range of available tools and authorities and is prepared to deploy secondary sanctions against foreign financial institutions that continue to support Iran’s activities. The short-term authorisation permitting the sale of Iranian oil already stranded at sea is set to expire in a few days and will not be renewed," read the post by the US Treasury Department.&nbsp;"My hope is for your swift action to identify and stop any illicit activity linked to Iran to avoid further action from the Treasury," &nbsp;said the US Treasury Secretary Scott Bessent in a letter, as reported by Reuters.Also Read: <a href="https://www.wionews.com/world/jd-vance-h1b-crackdown-american-identity-green-card-delays-1776229802305">JD Vance backs H1B crackdown, praises Indian-origin in-laws, tells immigrants to prioritise 'American identity' over origins</a>

<blockquote class="twitter-tweet">Treasury is moving aggressively with Economic Fury, maintaining maximum pressure on Iran. Financial institutions should be on notice that the department is leveraging the full range of available tools and authorities and is prepared to deploy secondary sanctions against foreign…&mdash; Treasury Department (@USTreasury) <a href="https://twitter.com/USTreasury/status/2044122873036673130?ref_src=twsrc%5Etfw">April 14, 2026</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<h2>Why was there a sanction waiver for Iranian tankers?</h2>The sanction waiver was announced to address the global demand for crude oil, following the supply shocks caused by the US-Iran war, the damage to the oil production facilities in the Gulf and the blockade on the vital maritime chokepoint, the Strait of Hormuz. This resulted in a significant shortage in the crude oil supply, as the choke point accounts for 20 per cent of the global maritime trade, with countries like the Philippines declaring an energy emergency. The temporary sanction waiver on Iranian oil tankers had enabled around 140 million barrels of oil to reach global markets and helped keep the oil price in the range of $95-$105/per barrel despite the war in West Asia.&nbsp;<h2>Current status of the Russian sanction waiver</h2>The US waiver allowing countries to buy Russian oil has expired on April 11, and the US Treasury Secretary has hinted that it does not intend to renew the waiver. However, experts believe that Russian tankers do find their destination even with the sanctions. The expiration will hurt New Delhi specifically, as it removes another key supplier from the market. India imports almost 85 per cent of its crude oil requirements, so even if the Modi government cosies up with the Trump administration, its policies have been detrimental to the Indian market and energy security.&nbsp;

The US Treasury Department said it will not renew Iran's oil sanctions waiver, warning of “economic fury” and secondary sanctions, raising concerns over global supply and India’s energy security.

The Trump administration has announced that it will not renew the 30-day temporary sanction waiver for the Iranian oil tankers stranded at sea, which is set to expire on April 19, 2026 (Sunday). The US Treasury Department, in a social media post on the platform X, announced that it will be moving with “economic fury”. It also announced that the administration is considering further secondary sanctions against any country that is considering support for Iran's activities. The administration has previously announced a similar waiver on Russian oil, which it quietly allowed to expire without renewal. "Financial institutions should be on notice that the department is leveraging the full range of available tools and authorities and is prepared to deploy secondary sanctions against foreign financial institutions that continue to support Iran’s activities. The short-term authorisation permitting the sale of Iranian oil already stranded at sea is set to expire in a few days and will not be renewed," read the post by the US Treasury Department. "My hope is for your swift action to identify and stop any illicit activity linked to Iran to avoid further action from the Treasury," said the US Treasury Secretary Scott Bessent in a letter, as reported by Reuters. Also Read: JD Vance backs H1B crackdown, praises Indian-origin in-laws, tells immigrants to prioritise 'American identity' over origins

The US Treasury Department said it will not renew Iran's oil sanctions waiver, warning of “economic fury” and secondary sanctions, raising concerns over global supply and India’s energy security.

US to end Iran oil sanctions waiver, warns of 'economic fury' and secondary sanctions

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Iran-linked 'shadow fleet' uses ship-to-ship transfers near Malaysia to bypass oil sanctions

US to end Iran oil sanctions waiver, warns of 'economic fury'