Iranian crude evades US blockade via Malaysian waters, heading to Chinese refineries

On Saturday, the Iranian-flagged tanker Humanity sailed through the Straits of Malacca, entered the Eastern Outer Port Limits—an area about 70 km off Malaysia's coast—and then disabled its AIS, a maneuver maritime experts link to preparing a ship-to-ship transfer of Iranian crude. Satellite tracking suggests the cargo is destined for China, where small independent refineries, less exposed to the US financial system, regularly buy discounted, sanctioned oil.

The EOPL has long served as an informal hub for Iranian, Russian and Venezuelan petroleum, and activity has persisted throughout the five-month US-Israel conflict and a US naval blockade that ran from mid-April to mid-June and was reinstated in mid-July. Researchers from SeaLight and Columbia University report dozens of vessels using false identities and "dark" transits, while Malaysia's recent amendment to its EEZ Act seeks to curb illegal anchoring and bunkering, though enforcement remains hampered by jurisdictional gaps.

Payments are processed via China's Cross-Border Interbank Payment System, bypassing SWIFT, and Beijing has blocked recent US sanctions on several "teapot" refineries. Despite a 40 % drop in Iranian oil purchases by major Chinese firms, the EOPL network continues to move the remaining volume, highlighting the limits of sanctions when alternative logistics and finance channels exist.