Malaysian bust spotlights shadow fleet oil trade in Southeast Asia

AdvertisementMalaysiaThis Week in AsiaEconomicsMalaysian bust spotlights shadow fleet oil trade in Southeast AsiaTwo tankers were intercepted in waters off Penang on Saturday during an alleged illegal transfer of more than 700,000 litres of diesel 3-MIN READ3-MIN ListenUshar DanielePublished: 9:30am, 14 Apr 2026The bust of an illegal transfer of oil between tankers in Malaysian waters has returned the spotlight to the shadow fleet trade in fuel – much of it from sanctioned nations – in Southeast Asia, which continues despite the paralysis of legitimate shipping routes triggered by the Iran war.Two tankers were intercepted in waters off Bagan Ajam, off the coast of Penang, on Saturday during an alleged illegal transfer of more than 700,000 litres of diesel worth an estimated 5.43 million ringgit (US$1.16 million), in a highly publicised seizure by the Malaysian maritime enforcement agency stretched thin across a vast patch of sea. “Checks found that both vessels were berthed side by side and suspected of carrying out an unauthorised ship-to-ship transfer of fuel,” said Captain Muhammad Suffi Mohd Ramli, director of the Penang Malaysian Maritime Enforcement Agency. AdvertisementTwenty-two crew members on both vessels were detained, he told This Week in Asia, believed to be from Malaysia, Myanmar, Russia, the Philippines and Indonesia. But he did not speculate on the ownership of the vessels or where the cargo was believed to have originated from. Both vessels were berthed side by side and suspected of carrying out an unauthorised ship-to-ship transfer of fuel, according to Captain Muhammad Suffi Mohd Ramli. Photo: Facebook / Agensi Penguatkuasaan Maritim MalaysiaUnder Malaysian law, ship-to-ship fuel transfers require prior approval from the Marine Department and can only be carried out in designated areas by vessels in full transparency, with their transponders switched on after clearance has been obtained. AdvertisementSelect VoiceSelect Speed0.8x0.9x1.0x1.1x1.2x1.5x1.75x00:0000:001.00x