Illicit Iranian oil shipments continue to move through Asian waters toward China, generating a critical revenue stream for Tehran and helping Beijing build large crude stockpiles despite sanctions and heightened regional conflict, the Financial Times reported on Friday. 

More than 1-million barrels a day on average travel along the Iran-to-China route, much of it moved by shadow fleet tankers that transit from the Gulf through the Indian Ocean and into waters off Malaysia and Singapore, where ship-to-ship transfers take place before cargoes continue to Chinese refineries, according to the report.

Analysts cited by the FT said the trade has remained broadly intact for now because Iran accelerated exports in the weeks before the latest war-related disruption, leaving substantial volumes already afloat.

One tanker highlighted by the FT, the Iranian-flagged Huge, passed through the Singapore Strait on Monday afternoon carrying oil that had risen sharply in value as Brent crude approached $120 a barrel. The vessel has been on the U.S. sanctions list since 2018 because of links to the National Iranian Tanker Company.

The report said only four very large crude carriers had been spotted leaving the Strait of Hormuz since the United States and Israel began military action against Iran on February 28, suggesting fresh departures have slowed. Even so, market participants told the FT that oil already loaded before the conflict is still feeding what they described as essentially business-as-usual trade between Iran and China.

Data cited by the FT from S&P showed Iranian oil accounted for just over 1-million barrels a day of Malaysian crude loadings to China last year, up from 769,000 barrels a day in 2024 and 229,000 barrels a day in 2023. Including other categories such as “unknown” and “Malaysian blend,” which the FT said are believed to consist largely of Iranian crude, the total rises to nearly 1.2 million barrels a day, more than 13 percent of China’s annual imports.

Maritime intelligence company Tanker Trackers follows 1,482 sanctioned vessels and estimates the wider global dark fleet exceeds 2,000 ships when vessels operating under false flags are included. Analysts told the newspaper that many of the ship-to-ship transfers occur in the Eastern Outer Port Limits off Malaysia’s southeastern coast, an area they described as difficult to police and subject to limited oversight. 

Transfers in those waters have surged. Using mainly satellite imagery, the advocacy group United Against Nuclear Iran observed 679 such transfers last year, up from 280 in 2023, according to the newspaper.

Read more at the Financial Times