The United States has expanded sanctions on tankers transporting Iranian crude, disrupting the flow of oil to China, Iran’s largest customer.
The transport of Iranian crude to China generally involves two stages: first, sanctioned or Iranian-owned tankers load oil at Iranian terminals and travel to a midway point in Southeast Asia, often near Malaysia, where they anchor.
However, sanctions have targeted several vessels previously used to transport cargoes to China.
This has forced some operators to abandon this segment of the trade, reducing the number of tankers available for the route, according to ship-tracking data from Bloomberg and sources who requested anonymity due to the sensitivity of the issue.
The result has been reduced Iranian crude supply at higher prices for China’s independent refiners, which account for about 90% of Tehran’s exports.
In response, these refiners have turned to alternative sources, including Africa and other parts of the Middle East, purchasing leftover oil from previous trading cycles.
Operators of sanctioned ships fear that port authorities may deny entry, forcing them to find an alternative destination for the cargo and bear additional costs. The U.S. expanded sanctions to include 20 crude-oil tankers on October 11 and added another 12 in the weeks that followed.
Typically, tankers handle one segment of the journey—either from Iran to Southeast Asia or from Southeast Asia to China—based on ship-tracking data from Bloomberg. This arrangement minimizes the time vessels spend traveling without cargo.
Of the tankers sanctioned on October 11, all but one have operated in Southeast Asian waters this year, with eight primarily focused on the route to China, according to ship-tracking data.
Some of these vessels are now altering their roles within the Iranian crude trade.
The tanker has stayed east of peninsular Malaysia since August 2023, awaiting transfers of Iranian crude from other vessels to transport to China, according to Starboard Intelligence Maritime data.
In October, the Shanaye Queen was added to the U.S. sanctions list. By November, it began sailing west and is now near Iranian waters, according to ship-tracking data.
The tanker was renamed Marigold in November and now operates under the Guyanese flag instead of Malaysia’s, as noted in the maritime database Equasis.
By changing the vessel’s name and flag, ship operators aim to evade scrutiny and reduce the risk of detection during port inspections.
The Dimitria II was renamed Hong Lu shortly before being sanctioned. Previously, it operated between Southeast Asia and China. On October 26, the ship began moving west of the Malaysian peninsula and turned off its transponder—a practice known as “going dark”—to conceal its movements.
