Chinese Tankers Using Evasive Tactics to Transport Iranian Oil

Oil tankers linked to Chinese state-owned oil company CNPC have transported large amounts of Iranian crude oil in recent months, according to a report this week from the Financial Times. The oil shipments appear to violate U.S. sanctions on Iran.

Satellite imagery published by the Financial Times indicates that two of the oil tankers—which the Financial Times identified as the Tian Ying Zuo and the Pacific Bravo—recently conducted ship-to-ship transfers with sanctioned Iranian vessels. Documents filed with Hong Kong’s corporate registry reveal that the two vessels are linked to Kunlun Shipping Company Limited, which we investigated last month for similar activities.

During these transfers, both vessels used evasive tactics such as disabling automatic identification system (AIS) beacons to mask their location. This tactic is frequently used by vessels attempting to evade detection when engaging in activity that violates sanctions. Vessels shipping sanctioned products to the Democratic People’s Republic of Korea (DPRK) frequently disable AIS in the course of such shipments.

We found that, at the time the Tian Ying Zuo and Pacific Bravo were transporting Iranian oil, the operators of those vessels also owned or operated at least seven tankers in total:

At least two of these vessels, the Sea Dolphin and CCPC Vanguard, have also recently transported Iranian petroleum products. Last month, we wrote about commercial ties between the Sea Dolphin’s management and CNOOC, a major Chinese state-owned oil company.

All seven vessels can be linked back to Hong Kong-based Kunlun Shipping Company Limited, which manages the Sea Dolphin. However, corporate filings and ship registry records reveal that the vessels’ names, owners, and operators have changed frequently in recent months. Moreover, the vessels are owned and managed by a web of companies stretching from Hong Kong to Liberia to the British Virgin Islands, which makes it difficult to conclusively determine who ultimately owns them.

All of the above are tactics frequently used by illicit actors to evade shipping-related sanctions. The U.S. government summarized many of these tactics earlier this year in an advisory about illicit shipping practices. While the advisory was focused on the DPRK, these recent incidents show that the same tactics are increasingly being used by vessels shipping Iranian petroleum products to China.