Iran Uses Malaysia to Sell Oil Abroad

Iran is using the help of service providers based in Malaysia to sell its oil abroad circumventing U.S. sanctions, according to a U.S. government official.

“The capacity of Iran to move its oil has relied on... these types of service providers that are based in Malaysia. We want to have a direct conversation with Malaysians about that,” he added, as quoted by the AFP.

“Stopping these oil shipments will deal a critical blow to Iran’s ability to fund these attacks around the world including the Houthi attacks that are currently threatening commercial shipping,” the official also said.

The U.S. has been trying to prevent Iran from exporting oil ever since the Trump administration reintroduced sanctions on Tehran back in 2018. So far, however, the effort has been largely unsuccessful, not least because for at least part of that period there has not been all that much willingness to enforce the sanctions more strictly, risking an oil supply tightening.

As a result, Iran has actually been expanding its oil exports. In the first quarter of this year, these reached the highest in six years, for a daily average of 1.56 million barrels, almost all sold to China.

“The Iranians have mastered the art of sanctions circumvention,” Fernando Ferreira, head of geopolitical risk service at Rapidan Energy Group, told the FT in April. “If the Biden administration is really going to have an impact, it has to shift the focus to China.”

A so-called dark fleet of tankers has been instrumental for this export growth as has the building of a network of partners and service providers to move the oil.

"Iran is continuously developing and expanding not just the network of middlemen and trading companies involved in the sale of its oil, but also its own fleet of tankers that it predominantly uses to move its crude," Nader Itayim, Middle East editor of Argus, told Radio Free Europe earlier this month.

By Charles Kennedy

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