China is covertly importing large volumes of Iranian oil through a clandestine network of vessels operating in international waters near Malaysia and Singapore, according to a major investigation by CBS News. The report, corroborated by maritime analysts and US officials, alleges that China continues to bypass US sanctions on Iran through a so-called “dark fleet” of tankers engaging in ship-to-ship transfers under cover of deception.

The revelations come amid escalating tensions over Iran’s nuclear programme and Washington’s efforts to curtail Tehran’s energy revenues, which are seen as a key source of funding for both its domestic infrastructure and overseas military activities.

The “dark fleet” — a term used to describe tankers that disable their transponders and conceal their identities — has been operating with increasing boldness in the Riau Archipelago, a chain of islands in eastern Malaysia not far from the busy shipping lanes of the Strait of Malacca. These waters have become a hotspot for illicit oil trading, where Iranian crude is transferred offshore to tankers headed for Chinese ports.

“This is dark fleet parking central,” said Charlie Brown, a former US Navy officer and senior adviser at United Against Nuclear Iran (UANI), a watchdog group that tracks sanctions violations. “We’ve observed these operations for years, but the scale and visibility of these recent transfers are unprecedented.”

During a voyage with CBS News, their crew reportedly witnessed at least 12 ship-to-ship transfers in a single day. The tankers involved had their Automatic Identification System (AIS) signals turned off, a common tactic used to evade detection. Some had even deployed tarpaulins and nets to obscure their names and identification numbers – both violations of maritime conventions.

One vessel identified was the Stellar Oracle, sanctioned by the US Treasury Department in May 2025 for carrying Iranian oil. Another, known only as the Alps — believed to be using a false name — was seen transferring crude to a vessel called the Eon, which had not previously appeared on any sanctions list. The sighting now places the Eon in violation of current US restrictions, potentially making it subject to future penalties.

According to a 2024 US Congressional report, this covert oil trade may have generated as much as $70bn for Iran over several years, helping to stabilise its economy and fund its contested nuclear development programme. While successive US administrations have imposed layers of sanctions aimed at curtailing Iran’s oil exports, enforcement remains a challenge.

China, for its part, rejects the legitimacy of unilateral US sanctions, asserting that its trade with Iran is lawful and aligned with international norms. The Chinese Foreign Ministry has previously stated that it “opposes any country’s extraterritorial jurisdiction” and maintains “normal energy cooperation” with Iran according to the Ministry of Foreign Affairs.