The United States sees Iran's capacity to move its oil as reliant on service providers based in Malaysia, with oil being transferred near Singapore and throughout the region, a senior US Treasury official said on Tuesday.
Washington has imposed significant sanctions on Iran and its proxies aimed at choking financial flows it said were being used to foment instability in the Middle East.
Iran relies on the so-called “ghost” fleet of tankers that belong to shadowy parties with an aim to export oil and circumvent US sanctions, which have blocked Iran's exports since May 2019, a year after former US President Donald Trump withdrew from the 2015 nuclear deal.
Brian Nelson, the Under Secretary of the Treasury for Terrorism and Financial Intelligence and Neil MacBride, Treasury General Counsel, are in Singapore and Malaysia from Monday until Thursday.
The department said the visit was to advance its work in countering financing and revenue generation by Iran and its proxies.
The official said on condition of anonymity that Tehran’s oil sales in East Asia have financed its armed proxies, including Palestinian group Hamas and Yemen’s Houthi militias, according to AFP.
The US Treasury is increasing its focus on financing for militant groups routed through Southeast Asia, including through fundraising efforts and illicit sales of Iranian oil.
The official also told reporters in a background briefing that the United States was trying to prevent Malaysia from becoming a jurisdiction where Hamas could both fundraise and then move money.
“Stopping these oil shipments will deal a critical blow to Iran’s ability to fund these attacks around the world including the Houthi attacks that are currently threatening commercial shipping,” the official said.
“We are concerned about Hamas' capacity to fundraise in the region, including in Malaysia, so want to have a direct conversation about those concerns,” he added.
Reuters quoted the US official as saying that “it's appalling that they seek to take advantage of the outpouring of support for the Palestinian people to siphon money for their violent and destabilizing activities,” while declining to name the suspect charities.
He also said the United States saw Iranian oil being transferred near Singapore and throughout the region.
“The capacity of Iran to move its oil has relied on sort of these types of service providers that are based in Malaysia. So we want to have direct conversation with Malaysians about that.”
Last December, the US Treasury imposed sanctions on four Malaysia-based companies it accused of being fronts supporting Iran's production of drones.
US Treasury Secretary Janet Yellen said last month that Washington was working to diminish Iran’s ability to export oil, adding there might be “more that we could do.”
The official said sanctions and export controls against Russia were seeing progress, adding the Russian oil price cap was reducing Moscow's capacity to profit from oil sales while preserving the stability of global energy markets.
Singapore is a major shipping hub. Insurance and other maritime service providers operating in Singapore have warned of evasion of the price cap on Russian oil, complaining that it is difficult to confirm whether paperwork promising oil is bought at or below the $60 cap is accurate.
