top of page

Malaysia and the Dark Fleet

A risky trade in sanctioned crude oil is taking place off the coast of Johor.

“An accident waiting to happen,” tweeted a senior analyst at Lloyd’s List Intelligence. Michelle Wiese Bockmann had spotted a cluster of 43 oil tankers jostling in international waters off the coast of Malaysia last November. The advanced age of the vessels (20 years on average), as well as their amorphous owners and unknown insurance status, were all cause for concern. The tanker traffic jam, she concluded, was a maritime safety hazard in one of the busiest international shipping lanes.

The proliferation of VLCCs (Very Large Crude Carriers) near Johor was an early indicator of a major shift in global oil flows. In December 2022, Europe stopped importing Russian oil and petroleum products. Crude prices were capped at $60 a barrel as part of the sanctions package. Two months later, G-7 nations imposed another price cap on premium products like diesel. With Europe officially off-limits, Russian oil flooded into the Asian market.

Energy industry experts were bracing for impact. “If the price cap is imposed, economic theory will collide with the messy reality of the market,” predicted Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington, D.C.

The price cap led to a noticeable uptick in activity by the “dark fleet,” industry shorthand for oil carriers that use deceptive shipping practices such as hiding their location, frequently changing flags, or obscuring their ownership structure. These vessels risk losing insurance coverage if their sanctions evasion activities come to light. According to Windward, Singapore is among the top three ports of origin for dark fleet ships.

The international waters off the coast of Malaysia have been a hub of dark fleet activity for more than a decade. Tankers ferrying oil from sanctioned nations like Iran and Venezuela have routinely converged in the area to carry out ship-to-ship transfers of crude. The cargo is stored in VLCCs for blending and is sold under brand names like Mal Blend or Singma, masking the product’s country of origin. Small, independent refiners in China, known as “teapots,” are the primary market for the low-cost blends.


bottom of page