International sanctions are costing each Iranian citizen an estimated 530 million rials or about $500 annually in the non-oil trade sector alone, a former central bank governor has said.
An analysis of discrepancies between tanker tracking data and China’s customs records shows Iran is using forged documents not only from Iraq, but also from the United Arab Emirates, Oman and especially Malaysia to export oil to China.
Hayyan Abdul-Ghani, Iraq’s oil minister, recently said that Iranian tankers use forged Iraqi documents to circumvent sanctions and the issue has been reported to the United States. Iran’s oil ministry dismissed these remarks as “negative and malicious propaganda.”
The Iraq case
Regarding Iraq specifically, data from Kpler, a commodity intelligence firm, and Iraqi domestic sources indicate that last year Iraq exported 1.19 million barrels per day (mbpd) of crude oil to China.
However, Chinese customs reported receiving 1.276 mbpd from Iraq.
In simpler terms, Iran disguised a total of 31 million barrels of its crude oil (equivalent to 86,000 bpd) as Iraqi oil and shipped it to China last year.
Statistics indicate that the practice has been underway since at least 2023. However, formal acknowledgment by Iraqi officials appears to have followed the tightening of Iran sanctions enforcement by the new US administration under President Donald Trump. Abdul-Ghani also noted that Baghdad has received reports of US naval forces seizing tankers in the Persian Gulf carrying Iraqi documents, but said Washington has been informed the documents are forged.
Iran’s LPG, mazut exports under the Iraqi brand
Since 2016, Iraq has been an LPG exporter. Kpler’s data shows that Iraq’s LPG exports surged last year, primarily due to the launch of a new oil refinery in Baghdad.
This development has further enabled Iran to sell its own LPG under Iraqi brand.
While China—importing a third of Iraq’s oil—does not purchase Iraqi LPG, but other Asian countries like Bangladesh do.
Several months ago, the head of Bangladesh’s Association of LPG Traders and Distributors sent a letter to the government and the central bank, warning about the entry of Iranian LPG shipments into the country with forged documents. The letter specifically mentioned a 10,000-ton LPG shipment carried by the vessel G YMM, which arrived in August under the branding of Iraq’s Basra Gas Company. However, in September of last year, the Basra Gas Company told Bangladesh’s Business Standard newspaper that this vessel had never loaded cargo from Iraq.
Additionally, Lloyd’s Listrecently estimated that over half of LPG cargoes claiming Iraqi origin may actually be Iranian.
Kpler data seen by Iran International reveals that Iran’s daily LPG exports soared to 330,000 bpd last year—2.5 times the 2020 level. Annual revenue from LPG exports (propane and butane) exceeds $10 billion, making it a significant component of Iran’s petroleum exports.
Previously, Reuters cited industry and trade sources in reporting a complex network in Iraq used for exporting Iranian fuel oil (mazut).
Kpler’s data shows that Iran loaded 230,000 bpd of mazut last year for export. This is a significant portion of its daily shipments of crude and other oil products.
There have been numerous reports about Iran’s use of forged documents to export oil and petroleum products under the names of the UAE, Oman, and particularly Malaysia.
The peculiar case of Malaysia
Kpler previously told Iran International that around 60% of Iran’s oil reaches China under the label of Malaysian crude.
Commenting on Iran’s rebranding tactics, the tanker-tracking firm TankerTrackers told Iran International: “Apart from Chinese data, there is no definitive way to determine the exact volume of rebranded Iranian oil. However, discrepancies in China’s import figures reveal the pattern—for example, when customs report 1.5 million barrels per day from Malaysia, but Malaysia’s actual exports are only a fraction of that.”
Samir Madani, an analyst at the firm, added: “If ship-to-ship transfers occur near Iranian waters and then head directly to China, the oil is most likely recorded as Iraqi or Omani crude. If the transfers take place in Riau, it’s reported as Malaysian.”
One striking discrepancy: Malaysia produces less than 570,000 barrels per day, yet Chinese customs data shows it imported 1.4 million barrels per day from Malaysia last year. Much of that volume is Iranian oil, along with some sanctioned Russian and Venezuelan crude.
Since US oil export sanctions were imposed on Iran in 2018 and 2019, Malaysia’s oil production has actually declined by 20%. Yet, its crude oil exports to China have increased eightfold over the same period.
Neither the Malaysian nor Chinese government has offered an explanation for how Malaysia’s exports to China are triple its total production capacity. The discrepancy, however, underscores the previous US administration’s broad leniency under President Joe Biden in enforcing sanctions against the Islamic Republic.
Mohammad Hossein Adeli, the former head of the Central Bank of Iran under President Akbar Hashemi Rafsanjani, told the Khabar Online website that sanctions force Iranian traders to pay a premium of 10% to 20% above market prices for goods destined for Iran.
Economic hardships for Iranians have mounted as US-led sanctions and official mismanagement have sent costs of living soaring and the currency to historic lows.
The need to use covert routes to bypass sanctions necessitates multiple layers of documentation to conceal the final destination of goods, he added.
Establishing shell companies in third countries to aid in obscuring the destination further inflates the final price of imported goods.
Estimating the sanctions-evasion processes add almost a third to the original price of each product, Adeli referred to Iran's foreign trade volume of approximately $150 billion in the Iranian year 1402 (March 2023-March 2024).
"Thirty percent of this amount is $50 billion. This figure... is equivalent to the government's annual budget."
The figure totals 530 million rials per Iranian citizen annually, meaning a family of four effectively bears an additional monthly expense of 180 million rials (about $180) due to the sanctions' impact on non-oil trade.
While Iranian authorities estimate a family of three requires about $400 monthly for basic needs, the average worker earns approximately $120 per month.
Adeli's assessment focuses solely on the non-oil trade sector. Oil exports, which make up the bulk of government revenue, are also heavily sanctioned.
In a report late last year, Iran International estimated that sanctions-evasion tactics and the use of trustee companies cost Iran at least $13.5 billion in oil export revenue during the Iranian year 1403 (March 2024-March 2025).
In February, US President Donald Trump signed a directive to reinstate the so-called maximum pressure policy against Iran, aimed at bringing Iranian oil exports to zero. He emphasized that the Islamic Republic should no longer be able to sell oil to other countries.
