Iran’s Oil Still Reaches China Through Malaysian Waters as Tehran Claims Sovereignty Over Hormuz
A sanctioned tanker carrying Iranian liquefied petroleum gas (LPG) slipped past the U.S. naval blockade and unloaded in China on Oct. 21.
The SOGL loaded about 500,000 barrels of LPG at Iran’s Assaluyeh Port in late August and left the blockade zone on Sept. 1. After stopping at an anchorage off Malaysia, it sailed north through the South China Sea to Qinzhou Port in China’s Guangxi region.
The U.S. Treasury’s Office of Foreign Assets Control added the vessel to its sanctions list on Oct. 8. The SOGL has sailed under the flags of Comoros and Zimbabwe.
The anchorage, Malaysia’s Eastern Outer Port Limits (EOPL), lies about 70 kilometers offshore. Ships use it to wait, resupply, store oil and transfer cargo between vessels. On Sept. 16, United Against Nuclear Iran (UANI), a U.S. advocacy group, chartered a supply boat and traveled about 100 nautical miles into the anchorage.
Its team filmed the SOGL receiving fuel and services and spotted Iranian-flagged cargo ships. UANI senior analyst Jemima Shelley called the EOPL “a key node in Iran’s oil trade to China” and said Malaysian authorities appear to be turning a blind eye. Tankers involved in the trade switch off their automatic identification system (AIS) transponders, sail under false flags and sometimes transfer cargo in international waters.
UANI has identified nine small tankers carrying Iranian oil or LPG that have breached the blockade since Washington reinstated it on July 14. The blockade was first imposed on April 13 and lifted in mid-June. Shelley described it as “an overwhelming success at preventing vessels laden with Iranian oil,” saying only “opportunistic small tankers” are getting through.
Reuters data put Iran’s LPG shipments since July at about 4.1 million barrels, compared with roughly 30 million barrels during the same period a year earlier, according to Kpler and Vortexa. Adm. Brad Cooper, commander of U.S. Central Command (CENTCOM), said the blockade has kept at least $25 billion worth of Iranian crude off the market. Homayoun Falakshahi, head of crude oil analysis at Kpler, told The Wall Street Journal, “There’s no more oil to discharge to China anymore.”
Shelley said China historically took about 80 percent of Iran’s liquid cargo exports and now takes nearly all the oil and LPG Iran manages to ship. Chinese imports recorded as Malaysian oil fell sharply after the blockade cut off Iranian exports, indicating that Iranian crude had been relabeled as Malaysian. The blockade covers the southern sea routes that, according to Iranian President Masoud Pezeshkian, carried 75 to 80 percent of Iran’s trade.
Iranian media report that a larger cargo has also breached the blockade. On Nov. 1, Iran’s WANA news agency reported that a crude carrier carrying about 2 million barrels had docked at a Chinese port after a voyage of roughly three and a half months. Citing satellite imagery from TankerTrackers, WANA described it as the first Iranian crude cargo to reach China since July 14. It did not identify the tanker or the port.
Tehran has responded to the blockade by asserting authority over the Strait of Hormuz. In a statement carried by Press TV on Nov. 2, the Islamic Revolutionary Guard Corps (IRGC) Navy said the strait “remains under the sovereign control of the Islamic Republic.” It warned that any vessel switching off its identification systems or passing without prior coordination “will be treated as a threat.”
The IRGC Navy said two tankers traveling along an “unauthorized” southern route exploded after hitting mines. Days earlier, it claimed three tankers had struck mines on the same route. CENTCOM says it has cleared the strait of mines and that Iranian projectiles are hitting ships. The IRGC maintains that passage is unsafe for vessels that do not coordinate with the Persian Gulf Strait Authority, a body Iran created during the war to manage traffic through Hormuz.
Iran’s parliament is moving to put that claim into law. On July 14, the day the blockade was reinstated, hardline lawmakers introduced the “Strategic Action for the Security and Sustainable Progress of the Strait of Hormuz and the Persian Gulf” bill. The official text has not been published.
According to a May draft carried by state media, the Hormuz management bill would formalize Iran’s sovereignty claim over the strait and bar U.S.- or Israeli-flagged ships, along with military, intelligence and other vessels deemed “hostile” by Iran’s armed forces. It would also require every ship to obtain a permit, disclose its cargo and pay a fee, while allowing authorities to confiscate up to 20 percent of a cargo’s value for noncompliance.
Ebrahim Azizi, head of parliament’s National Security and Foreign Policy Committee, said, “This is the first step; subsequent measures are forthcoming.” On Oct. 2, committee spokesman Hassan Ghashghavi announced that the panel had finished reviewing the bill, which would allow Iran to charge commercial ships for navigation, environmental protection and fuel services. No floor vote has been reported.
Iran’s legal position draws on its interpretation of a treaty it signed but never ratified. Tehran signed the UN Convention on the Law of the Sea on Dec. 10, 1982, submitting a declaration that characterized some provisions as negotiated trade-offs rather than a codification of existing customary law. Iran treats passage through the strait as subject only to the rules of innocent passage under its 1964 Maritime Code and 1993 Act on Marine Areas.
Under the convention’s transit-passage rules, passage through an international strait “shall not be impeded,” and coastal states may not charge for passage itself. During the war, Iran has reportedly allowed ships from countries it considers friendly, including China, Russia, India, Iraq and Pakistan, to pass through the strait.
Washington rejects Tehran’s claim. “Let me be clear: The Strait of Hormuz is controlled by the United States and our regional partners, not Iran,” Cooper said on Oct. 16. During an Oct. 25 visit to the strait, he reaffirmed the U.S. commitment to freedom of navigation.
Trump has made his own territorial claim. On Aug. 15, he said he would “declare the Strait of Hormuz part of American soil.” Four days later, he posted a map labeling it “new US territory.”
Tehran claims the right to decide which ships may pass through Hormuz, while the U.S. blockade has stopped most Iranian oil and LPG exports. Nearly all the cargo that gets through goes to China, with the anchorage off Malaysia serving as a key stop along the route.
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