Global Oil Smuggling Network Exposed
On Wednesday, the Financial Times reported, in collaboration with a research group known as C4ADS, about a complex international operation that is circumventing sanctions to ship significant amounts of oil from Russia, Iran, and Venezuela to China.
Essentially, this operation was initiated by an Iranian accountant working for a Panama-based merchandise broker, referred to as the Ocean Glory Giant. The setup reportedly involves over 30 vessels valued at approximately $1 billion.
Interestingly, while the oil was supposedly sourced from Iraq, Malaysia, and other legitimate locations, tracking data indicated that these ships were actually picking up prohibited oil from Iran, Venezuela, and Russia. It seems the vessel was linked to a notorious Chinese holding company, which had previously been implicated in sanctions violations during Donald Trump’s presidency.
As noted by Andrew Boring, an investigator from C4ADS, the Ocean Glory network evolved into a sort of “superbroker” for legally acquired crude oil. This created a convoluted paper trail that complicated U.S. attempts to enforce sanctions against oil from these nations.
This operation seemed to gain momentum just after Mike Pompeo cautioned oil buyers to exercise extreme caution when dealing with Iranian products, warning that “the risk is simply not worth the benefit.”
Prominent Western entities drawn to the scheme, despite conducting due diligence, found the network’s complexities tough to navigate, making it easier to bypass routine background checks. The use of naval mortgages as a funding mechanism for the oil trade appeared to have helped maintain substantial backing from a significant Western bank, along with proactive investigators.
Initially, the vessels involved weren’t on any sanctions lists, but as sanctions expanded, some were later designated. I mean, it is pretty complicated—especially with Chinese businesses involved, making it challenging to trace activities back to authorized entities. Many of these companies, it seems, are tied to the Chinese government, and they don’t appear to enforce sanctions against countries like Iran, Venezuela, or Russia.
Maritime risk expert Claire Johnman told the Financial Times that, despite her extensive experience in oil smuggling, she hadn’t encountered a strategy quite like this one. She described it as a daring move to exploit the “grey zone between maritime law, finance, and geopolitics.”
“Since 2019, Iran’s oil trading network has become ever more sophisticated and decentralized, increasingly relying on front companies and informal intermediaries,” she said.
The so-called “naval mortgage” approach is indicative of part of a broader “shadow fleet” that exploits avenues to run afoul of sanctions and serve Russian and Chinese interests. This emphasizes the challenges in upholding strict sanctions when powerful nations decide to sidestep them.
On Tuesday, Russian Industry and Trade Minister Anton Alikanov mentioned that trade between Russia and China has been affected by sanctions, with bilateral trade dipping 8.1% in the first half of 2025 after peaking at a record $245 billion in 2025.
“In the medium term, we should expect a more moderate growth rate than before,” Alikanov stated during a business forum in Kazan, Russia.
Interestingly, some declines in trade seem more linked to falling demand and protectionist measures rather than just Western sanctions, as both economies adjust to their own challenges.
For instance, there’s been a prohibition on imports of Chinese trucks in Russia, citing safety violations. It sparked speculation about a sharp decline in Russian automaker sales, with some reporting inferior safety features, leading to the cessation of Chinese truck imports toward the end of July.
