China increased imports of Indonesian oil, which may be concealing sanctioned Iranian crude
Kyiv • UNN
China has sharply increased its oil imports from Indonesia, which traders link to the possible masking of sanctioned Iranian oil supplies. This comes amid a reduction in imports from Malaysia, which was previously a major transshipment hub for Iranian crude.
The rapid increase in Indonesian oil imports to China indicates a possible large-scale "renaming" of sanctioned Iranian crude. Traders state this, emphasizing that under the guise of Indonesian crude, shipments that are actually transshipped off the coast of Malaysia may enter China. This is stated in a Reuters article, writes UNN.
Details
China has sharply increased its imports of crude oil declared as Indonesian, and this, according to market participants, could be a scheme to disguise shipments of Iranian oil, which is under US sanctions. Traders recall that declaring an Iranian cargo as Malaysian has long been used to sell crude to Beijing, which has not officially imported Iranian oil since 2022, although its customs data regularly record larger volumes of Malaysian origin than Malaysia actually produces.
Statistics only reinforce suspicions. According to Chinese customs data, imports from Indonesia increased from less than 100,000 tons in 2024 to 9.81 million tons in the year to October. However, Indonesian customs reported 1.7 million tons of exports from January to September, of which only 25,000 tons officially went to China.
At the same time, imports from Malaysia – the main transshipment hub for Iranian oil – have almost halved since July compared to the March peak of 8.5 million tons. Two traders explained this by the increased attention of banks to cargoes marked as Malaysian, which forces them to look for other "paper" origins.
Some banks reject documents indicating origin from Malaysia
Analysts also note that Indonesia may become a less profitable destination if control is further tightened, although labeling schemes can adapt quickly.
Thanks to agreements between the US and Indonesia on energy supply... this source can often change on paper if monitoring and enforcement are strengthened
An additional factor was Malaysia's decision in July to tighten control over illegal STS transshipments, according to Energy Aspects and traders. At the same time, the scheme itself, according to them, continues to operate.
Most shipments of Iranian crude oil destined for China via the STS system still take place off the coast of Malaysia
According to Kpler, in the first ten months of this year, China imported more than 57 million tons of oil of Iranian or suspected Iranian origin, of which more than 51 million tons passed through STS transshipment.