The United States’ escalating sanctions on Iranian crude oil shipments appear to be disrupting Tehran’s oil trade, as reports indicate that more than 10 sanctioned tankers carrying Iranian crude are currently stranded off the coast of Malaysia. This could signal a slowdown in Iran’s oil exports to China, a key buyer of its sanctioned petroleum.
Iranian Oil Tankers Stalled Near Malaysia
According to Bloomberg, at least 11 Iranian oil tankers have either been stationary or moving at extremely slow speeds around Malaysia this week. Some of these vessels have remained anchored for over a month, with no apparent buyers.
The report, citing ship-tracking data, estimates that these ships are collectively carrying about 17 million barrels of Iranian crude. The tankers are concentrated in an area west of the Malaysian peninsula, a well-known hub for ship-to-ship transfers of Iranian oil. In recent years, Iran has relied on a network of “ghost fleets”—tankers that disable their tracking systems, conduct deep-sea transfers, rebrand oil shipments, and ultimately transport crude to Chinese refineries under falsified origins.
U.S. Intensifies “Maximum Pressure” Campaign
Since his return to the White House, U.S. President Donald Trump has reinstated the “maximum pressure” strategy against Iran, aiming to reduce the country’s oil exports to near zero. The policy is designed to curb Iran’s ability to finance regional militias and develop its nuclear program.
Bloomberg reports that U.S. authorities have significantly increased scrutiny over Iranian crude movements from key export terminals such as Kharg Island to intermediary points like Malaysia. Data from OilX suggests that the volume of Iranian oil stranded near Malaysia and Singapore is the highest since August of last year. However, it remains unclear whether these cargoes are awaiting ship-to-ship transfers or are held up due to lagging demand from China’s independent refineries.
Legal Action Against Iranian Oil Revenue
In a further tightening of its sanctions regime, the U.S. government has filed a lawsuit seeking to seize $47 million in proceeds from the sale of approximately one million barrels of Iranian oil. According to Bloomberg, the cargo was transported through a complex scheme between 2022 and 2024, designed to disguise its origin. The oil was allegedly misrepresented as Malaysian crude and shipped using tankers that manipulated their tracking systems to conceal Iranian involvement.
The lawsuit, filed in the U.S. District Court for the District of Columbia, claims that the transaction was conducted for the benefit of Iran’s Revolutionary Guard Corps (IRGC) and its overseas wing, the Quds Force—both designated as terrorist organizations by the U.S.
The contested shipment, which originated in southern Iran, was eventually unloaded in Croatia after being transferred between multiple vessels to evade U.S. sanctions. The cargo is currently stored at an oil facility in Croatia, pending further legal proceedings.
History of U.S. Seizures of Iranian Oil
This is not the first time Washington has intervened to block Iran’s efforts to circumvent sanctions. In December 2011, the U.S. Department of Justice announced the seizure of 1.1 million barrels of Iranian petroleum products en route to Venezuela. The confiscated oil was sold for over $26 million, with proceeds reportedly allocated to victims of state-sponsored terrorism.
More recently, since December 2024, the U.S. Treasury Department has ramped up measures against Iran’s fleet of very large crude carriers (VLCCs), each capable of transporting two million barrels of oil. These tankers are critical to Iran’s export operations, particularly in reaching China and India.
U.S. Targets Iran’s Oil Infrastructure
As part of its renewed sanctions strategy, Washington has also blacklisted Iran’s oil minister and imposed four rounds of economic sanctions on Tehran in the past two months. These measures extend to Iranian tankers as well as small, private Chinese refineries that process Iranian crude. According to Bloomberg, over two-thirds of tankers transporting Iranian oil have been sanctioned since late February.
The Biden administration had previously attempted diplomatic engagement with Iran, but Trump’s return to office has led to a renewed crackdown. In a recent interview with Fox Business, U.S. Treasury Secretary Scott Bessent reiterated the administration’s goal of reducing Iranian oil exports to below 100,000 barrels per day—a drastic cut from the estimated 1.5 million barrels per day currently being exported.
The Islamic Republic’s oil revenues help finance terrorist activities around the world, Bessent said, emphasizing that purchases of sanctioned Iranian oil by China and India are unacceptable. He added that achieving the targeted reduction would place Iran under severe economic pressure, exacerbating the country’s already fragile economy, which is struggling with budget deficits and high inflation.
In a further escalation, Washington recently sanctioned a Chinese oil storage facility that was purchasing Iranian crude, signaling that the U.S. is determined to disrupt Iran’s oil trade at every stage—from extraction to end-user sales.
The Future of Iran’s Oil Exports
Despite these aggressive measures, analysts predict that U.S. sanctions alone may not entirely halt oil trade between Iran and China. Tehran has consistently adapted to pressure by refining its smuggling techniques, utilizing intermediary traders, and engaging in barter deals.
However, with an increasing number of Iranian tankers left stranded and heightened scrutiny over ship-to-ship transfers, the U.S. campaign is clearly tightening the noose on Tehran’s oil exports. Whether Iran can continue to find workarounds or if this will lead to a significant reduction in its oil revenue remains to be seen.
