Malaysia releases tankers suspected of transferring illegal crude oil worth US$129 million

KUALA LUMPUR – Two tankers detained near Penang for suspected illegal crude oil transfers worth US$129 million (S$163 million) have been released on bond by the Malaysian authorities, and one of them was later spotted sailing past Singapore on Feb 3.

The vessels Nora and Rcelebra, believed to be part of the so-called “dark fleet”, were intercepted north of the port of Penang on Jan 29 and detained on suspicion of engaging in illegal ship-to-ship (STS) transfers.

The dark fleet is a network of tankers used to transport sanctioned oil while evading detection through opaque ownership, flag changes and disabled tracking.

Both vessels have been released on bond pending trial, said Captain Muhammad Suffi Mohd Ramli, Penang maritime director at the Malaysian Maritime Enforcement Agency (MMEA).

“Both vessels were released on bonds of RM300,000 (S$97,000) on Saturday. The case is pending trial,” Capt Muhammad Suffi told The Straits Times on Feb 3.

The bond amount corresponds to the statutory penalty for offences involving unauthorised STS transfers. Such transfers are deemed illegal when carried out without authorisation and are often conducted in open seas to obscure the origin of cargo, allowing operators to evade sanctions, taxes or enforcement checks.

The 333m-long Rcelebra has been under European Union sanctions since February 2025 for its involvement in exporting sanctioned Russian crude, as well as Iranian and Venezuelan petroleum products.

It currently flies the flag of Cameroon, having previously sailed under the flags of Hong Kong, Greece, Malta and Vietnam. Nora flies the flag of Guyana.

While Malaysia has been identified as a hub for illegal STS transfers in recent years, they are more commonly reported off the east coast of Johor, making the Penang case a rare occurrence.

“Such cases in Penang are very rare, with the last recorded incident occurring in 2014,” Capt Muhammad Suffi said, adding that MMEA Penang will step up the monitoring of its waters, with the delivery of new, larger enforcement vessels in April.

Meanwhile, Mr Charlie Brown, a senior adviser at United Against Nuclear Iran (UANI), a United States-based advocacy group that monitors sanctions evasion, has criticised the release of the tankers on bond, describing it as a “slap on the wrist”.

“It’s an easy US$75,000 for Malaysia and a minor inconvenience for the cargo owner,” said Mr Brown, who is based in Singapore.

According to the group, instances of illegal STS activity involving sanctioned Iranian oil in Malaysian waters rose from 280 in 2023 to 679 in 2025, driven largely by demand from China.

While China has officially reported no imports of Iranian crude since 2022, its customs data has repeatedly shown imports of Malaysia-sourced oil exceeding Malaysia’s annual production, a discrepancy analysts say points to Iranian oil being relabelled as Malaysian.

Mr Brown added that due to weather limitations and UANI’s reliance on satellite monitoring, the actual number of illegal STS operations is likely higher.

“Lately, I’m seeing more than 10 STS transfers daily on clear days,” he said. “Last year, it was around five.”

Ms Muyu Xu, senior crude oil specialist at global trade analytical group Kpler, said that STS operations are rampant in Malaysian waters as most Chinese ports do not allow tankers sanctioned by the US Office of Foreign Assets Control to offload their cargo.

“Increasing flows of sanctioned cargoes from Iran, Venezuela, and to some extent Russia, combined with tighter US sanctions, are driving a growing need for STS operations before cargoes reach buyers in China,” Ms Xu said.

Despite their sanctioned status and the legal grey areas they operate in, ships such as Rcelebra can be seen sailing openly past Singapore.

Singapore-based ship spotter Remy Osman photographed Rcelebra sailing along the coast of Sentosa at about 10.30am on Feb 3, as it headed east towards the South China Sea.

“I was following reports about the supposed seizure of oil near Penang, so I tracked the ship as it approached Singapore,” he said.

Under the United Nations Convention on the Law of the Sea (UNCLOS), ships enjoy freedom of navigation beyond 12 nautical miles from shore. International straits – like the Strait of Malacca and the Singapore Strait – allow transit passage.

In 2023, the International Maritime Organization adopted a resolution urging member states to do more against dark fleets, including to monitor their territorial seas and exclusive economic zones for STS operations, and to inspect vessels that turn off their automatic identification system (AIS).

Mr Osman’s photographs show Rcelebra sitting low in the water, indicating that it was fully laden.

Data from the ship’s automatic identification system shows a draft of 20.5m, which typically indicates that an oil tanker is at or near full load.

Mr Osman, who began ship spotting during Covid-19 lockdowns in 2020, said he has seen a sharp increase in dark fleet vessels over the past year, echoing UANI’s observation.

“You can see them every day now – often multiple times a day,” he said.