Iran has relied on Malaysian service providers to get around international sanctions and sell its oil in the region. File (Image used for representation purpose only)
| Photo Credit: AP

Iran has relied on Malaysian service providers to get around international sanctions and sell its oil in the region, a senior U.S. Treasury official said on May 7 .

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.

Tehran’s oil sales in East Asia have financed its armed proxies, including Palestinian militant group Hamas and Yemen’s Huthis, the official said on condition of anonymity.

The oil shipments have been sent to buyers in the region through waters near Singapore and Malaysia, the official said.

“The capacity of Iran to move its oil has relied on these types of service providers that are based in Malaysia. We want to have a direct conversation with Malaysians about that,” the official added.

“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 U.S. Treasury will work with maritime operators and banking executives in Singapore and Malaysia to stop the sales, the official added.

Washington also wants to “prevent Malaysia from becoming a jurisdiction where Hamas perceives that it can both fundraise and then move money”, the official said.

U.S. 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”.

Hamas’ unprecedented October 7 attack on Israel resulted in the deaths of more than 1,170 people, mostly civilians, according to an AFP tally of Israeli official figures.

Vowing to destroy Hamas, Israel launched a retaliatory offensive that has killed at least 34,789 people in Gaza, mostly women and children, according to the Hamas-run territory’s Health Ministry.