Malaysia seizes US$129.9M in crude oil from tankers in illegal sea transfer probe

Malaysian authorities have seized more than 512 million ringgit (US$129.9 million) in crude oil and detained two foreign-flagged tankers suspected of conducting illegal ship-to-ship transfers. The vessels were intercepted 24 nautical miles west of Muka Head, Penang, in an enforcement operation last week.

The Malaysian Maritime Enforcement Agency (MMEA) confirmed the operation in a statement released on Saturday, 31 January 2026. The agency did not disclose the origin of the crude oil or the specific flag states of the vessels.

The tankers, collectively valued at 718 million ringgit, were reportedly found lashed together and anchored without approval. Maritime Captain Muhammad Suffi Mohd Ramli, Penang Maritime director, stated that the seizure followed a report received by a Penang Maritime patrol unit around 1 a.m. local time on Thursday.

Upon inspection, the two vessels were discovered in a “coupled position,” strongly indicating ongoing ship-to-ship crude oil transfers. Such operations are typically conducted at sea to obscure the origin of oil and circumvent international regulations.

Fifty-three crew members were on board, consisting of Chinese, Burmese (Myanmar), Iranian, Pakistani, and Indian nationals. The two ship captains were arrested and have been handed over to Penang state maritime investigators for further action.

Captain Muhammad Suffi said the case is currently being investigated under Section 491B(1)(l) of the Merchant Shipping Ordinance 1952 for anchoring without permission. This offence carries a penalty of up to 100,000 ringgit.

The case is also being pursued under Section 491B(1)(k) of the same ordinance, which covers the offence of conducting unauthorised ship-to-ship transfers. This offence can incur a fine of up to 200,000 ringgit per vessel.

The incident highlights persistent concerns over maritime security and enforcement in Malaysian waters, which are known hotspots for unauthorised ship-to-ship oil transfers. These covert operations are often used to facilitate trade in sanctioned or smuggled crude oil, masking origins and violating international sanctions or domestic laws.

In July 2025, Malaysian authorities announced heightened enforcement measures to curb such illegal maritime practices, following increased activity and global scrutiny of oil smuggling networks. Saturday’s seizure underscores the continuation of that policy.

Captain Muhammad Suffi affirmed that Penang Maritime will intensify surveillance and patrols across the state's territorial waters to ensure compliance with all maritime laws.