Iran is increasingly using Indonesian waters to move crude oil to China, a shift analysts view as part of Tehran’s efforts to bypass U.S. sanctions targeting its energy exports.

According to a Reuters report, Chinese buyers of Iranian crude are now favoring shipments trans-shipped off Indonesia, replacing Malaysia as the previous hub where Iranian oil was often rebranded before heading to Chinese ports.

Chinese customs figures cited by Reuters show a sharp spike in reported crude imports from Indonesia—from under 100,000 metric tons (mt) in 2024 to 9.81 million mt, or about 235,570 barrels per day (bpd), in the period through October. Over the same timeframe, China’s imports from Malaysia have plunged, falling by nearly half since July after peaking at 8.5 million mt in March.

Reuters reiterated earlier findings that much of China’s reported imports from several South Asian countries are believed to be Iranian oil in disguise. The shift toward Indonesia, the report says, reflects heightened scrutiny from banks over cargoes labeled as Malaysian.

Tehran has not confirmed allegations that it uses ship-to-ship transfers or regional intermediaries to mask the origin of its oil. Still, Iran’s export volumes have risen steadily in recent years, and industry experts say a large portion likely flows to private Chinese refineries—despite China officially reporting no imports of Iranian crude since 2022.

Data from energy analytics firm Kpler indicates China brought in an average of 1.37 million bpd of Iranian crude during the first ten months of this year.