The breakdown of indirect US-Iran diplomacy has led to additional sanctions targeting foreign entities accused of facilitating Iranian oil trade, with today's action by the US Treasury Department targeting companies in Singapore and Malaysia.
"Iran increasingly is turning to buyers in east Asia to sell its petrochemical and petroleum products, in violation of US sanctions," treasury undersecretary Brian Nelson said. "The US remains focused on targeting Tehran's sources of illicit revenue."
Treasury imposed sanctions on Singapore-based Asia Fuel and Unicious Energy and Malaysia-based Sense Shipping and Trading, accusing them of using Malaysia-based storage facilities and ship-to-ship transfers to sell Iranian oil and petrochemical products. Treasury also added Iran polyethylene producer Kabir Petrochemical and several other Iranian companies on the sanctions list.
Iran oil sanctions enforcement actions taken by the US Treasury in recent years have a common thread — the use of intermediaries, shell companies, a so-called dark fleet and storage facilities in neighboring countries. Iran continues to export crude, despite a US sanctions regime that in theory makes all such sales liable to criminal and economic penalties.
But the only country that seems capable of influencing Iranian export volumes is China, and only as a corollary of its domestic market management. Chinese imports from Iran via Malaysia rose to a record high 1.2mn b/d in November 2022, as independent refiners in Shandong province raced to use up their 2022 import quotas, Argus data show. China has been the primary destination of discounted Iranian crude since the US reimposed sanctions against Tehran in 2018.
