How a Shadow Economy in Asia Is Keeping Iranian Oil Flowing

Blacklisted Iranian oil has long been a source of perilous competition for Jeffrey Soh, whose job sometimes takes him on a supertanker moored in a corner of the South China Sea. His ship, the 1,264-foot-long Europe, is so cumbersomely large that it is semipermanently anchored for use as floating storage off the southwestern coast of Malaysia. On a recent Wednesday, a tanker named the Dubai Beauty was parked against it, pumping in marine fuel from Oman via thick, black hoses. “Up to 4,000 metric tons per hour,” Mr. Soh said. The sickly sweet smell of oil hung in the air. “But a transfer can take up to 72 hours.” These ship-to-ship, or S.T.S., transfers are a common practice in the petroleum industry, and a routine part of business for Mr. Soh’s firm, Contemporary Logistics, which has clients like Chevron. But in recent years, an Iranian shadow fleet has also used such transfers to illegally transport and sell millions of barrels of Iranian crude oil in the waters around Malaysia in evasion of American sanctions. The shadow fleet’s illicit cargo has flooded the global oil market at heavy discounts, suppressing prices for Mr. Soh’s clients. Its vessels, which are often old and dubiously insured, threaten to raise premiums for the rest of the industry whenever they are involved in an accident. And a few years ago, one of its tankers used one of his company’s storage units to deliver what turned out to be Iranian oil. “It’s very easy to get into trouble, too easy to get exposed,” he said. “And these days, if you say S.T.S. transfer and Malaysia, people group you with the dodgy ones.” The New York Times We are having trouble retrieving the article content. Please enable JavaScript in your browser settings. Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times. Thank you for your patience while we verify access. Already a subscriber? Log in . Want all of The Times? Subscribe .