Crude Intentions: How China Became the Clearing Market for Sanctioned Oil

The investigation reveals how China acquires oil from countries sanctioned by the United States. It uses a shadow fleet of thousands of largely aging tankers operating under foreign flags owned through opaque corporate to continue acquiring oil from sanctioned exporters. Using ship-to-ship transfers off the coast of Malaysia, sanctioned crude is disguised by reissued certificates of origin, bills of lading, and cargo manifests that erase its sanctioned provenance.

The investigation also makes several policy recommendations to combat these issues, including:

• Authorizing sanctions on ports and terminal operators receiving shadow fleet cargo, such as illegal crude.
• Establishing a sanctions evasion whistleblower reward program. The program should be available outside U.S. jurisdiction, as the most valuable sources are likely ship brokers, traders, and financial intermediaries operating in transshipment hubs such as Singapore, Hong Kong, Dubai, and Malaysia.
• Directing the Commodity Futures Trading Commission (CFTC) to launch a formal investigation into whether the systematic purchasing and routing of steeply discounted Russian crude by foreign refiners constitutes actionable market manipulation.

Read the full report here.