On the edge of one of the world's busiest shipping corridors sits an armada of tankers trading in billions of dollars worth of sanctioned oil.

We have found what we believe to be the largest cluster of dark fleet vessels anywhere in the world.

We've just come into the beginning of the cluster.

All around you can see oil tankers out of range of law enforcement.

Many of these ships gathered here in the South China Sea east of the Malaysian peninsula are part of what's known as the dark fleet, a network of ageing vessels that often operate without insurance and hide their location to move sanctioned oil.

Extensive research, data analysis and eyewitness accounts lay bare the workings of an Asian maritime hub that helps hundreds of millions of barrels of illicit oil move east despite the risks.

It was about trying to establish how big this phenomenon is, how big this problem is and therefore how big the risks are.

In 2023, a major accident occurred involving a dark fleet tanker.

The Pablo was a tanker that was coming back from China.

When we later looked at the satellite images of the Pablo, we could see that the deck was basically burned through.

Three of the crew were lost, so it's a reminder that there is a very real human cost here.

The Pablo had been operating for 25 years, far longer than the average life of a legitimate tanker.

It had no known insurer, meaning it lay stranded in the ocean for many months until Malaysia ultimately bore much of the recovery costs.

Old ships are no longer scrapped at the rates that they used to be and they're in fact now used in the dark fleet by companies and organizations that are willing to break the rules.

In the past, the international group was insuring almost 95 plus percent of all the ships in the world.

Now they're insuring about 80, 85 percent and that's dangerous.

The shadow fleet consists of very old ships.

There are plenty of accidents.

Shipping is a business full of risk.

That's why you have insurance.

The Pablo was just one of many dark fleet vessels that transit through the waters east of Malaysia, some of the busiest on earth.

What we see here in Singapore is highly regulated.

Hundreds of ships are passing here on a daily basis, up to 70,000 per year.

But just nearby here, there are other places that ships go where it's less well regulated.

We became aware of this flotilla in the end of 2023.

It was the size and the scale of the flotilla that kind of caught our attention.

Importantly, it's outside territorial waters and in an area where countries have much more limited enforcement rights.

Positioned midway between the oil exporters in the Persian Gulf and oil consumers like

China, it's an ideal spot for ships from east and west to converge.

Typically calm waters make transfers easier.

We've been following sanctioned oil for quite a long time and tracking that, we found that not only had that cluster grown, but also the number of ship to ship transfers, so these are transfers of oil done at sea, that number had increased steadily.

The trade in oil subject to US sanctions has surged since 2022, fuelled by curbs on Russian exports, as well as restrictions reimposed on Iranian crude in 2018.

A day before I got to office, everybody was saying Iran would be taking over the Middle

East.

It was just a question of when.

Now they're just looking to survive.

Not all the oil in this cluster and moving around this area is Iranian, but the vast majority is.

Because of US sanctions on Iran, Iran really needs to sell its oil and really needs the revenue that comes from these sales.

Iran sells 90 plus percent of its oil to China, and in particular to private refiners in China.

This is a multi-billion dollar trade.

In order to stay competitive, the Chinese refiners of course would like to procure the cheapest crude they can find.

And oftentimes the cheapest crude would be the ones that are restricted.

It is a known truth in the maritime circles, in shipping circles, that this cluster exists.

But I think what we were trying to do was really to put some scale around it.

How big is it?

How big are these risks?

How much oil is shifting through?

We've made our way out here today to try and take a closer look at just exactly how big this group of tankers, how big they are.

We're just going past Malaysia now, and then it's going to take us quite a few more hours to reach the point that we're after, which is where we saw a ship-to-ship transfer taking place yesterday on the satellite.

Just to be clear, a ship-to-ship transfer is not necessarily illegal.

However, if it is done as it is here in outer waters, there are certainly some questions.

We'd really like to find a couple of vessels that are, I would say, emblematic of the Dark Fleet.

We should have maybe three, four vessels of interest here, around here.

This is the start of the cluster, so this will be the busiest part.

The Iranians are somewhere here, but we have to basically be lucky enough to find them.

When we started this project, we were looking at AIS data mainly, and then we realised that

AIS is kind of not good enough, because a lot of these tankers, they don't want to be scrutinised, they don't want to be seen.

They switch off their AISs for weeks on end, so over time, we started to overlay satellite data.

What the satellite has enabled us to do is really examine the cluster, and we're able to, within that, count the number of ship-to-ship transfers that are happening.

These are very distinctive shapes, extremely visible against the water.

Using almost five years of satellite imagery, Bloomberg News built an algorithm to detect all the instances where vessels adopted the distinctive ship-to-ship position.

We've been able to show that that trade has been consistently increasing, which is something that I think the industry intuitively knew but couldn't really prove.

Of all the ships passing through the area in 2020, 5% were involved in ship-to-ship transfer.

Between January and October 2024, this has risen to 10.3%.

The data suggests some 350 million barrels of oil changed hands here in the first nine months of 2024.

That adds up to more than $20 billion.

Okay, so a few are coming up.

Are they tankers?

Of the three, the one on the left is a tanker, I think.

Yeah.

There's just so much traffic, you forget how much actually goes through these waters.

Oh, where? Which one?

Oh, there is, there is. There, there, there.

Oh, yeah, yeah, yeah.

Yeah, yeah, yeah.

That's where we went.

That's where we went.

Oh, yeah, yeah, yeah.

Oh, yeah, yeah, yeah.

Yeah, yeah, yeah.

That's where we went.

That's where we went.

Wow, found one.

Yeah.

Yeah.

We found two dark fleet vessels doing a ship-to-ship transfer, two super tankers.

It's Winwin and Titan, so two vessels that are known to us and on our list.

When we looked at the map earlier this morning, these vessels were not here.

So it's likely that they have their AIS transponders off, which again is fairly typical for dark fleet vessels.

The Titan and the Winwin display every characteristic of the dark fleet.

The Titan is known to have transported Iranian oil, while the Winwin's sporadic signalling draws an impossibly linear journey from China to the South China Sea.

It's really interesting, as we come round the side, you can actually see the cables connecting them both, and the pipes that will transfer the crude over, and you can see that right through the middle of the vessels.

See, there's some protection to prevent them from crashing.

In a ship-to-ship transfer, a number of safety precautions are in place to guard against accidents.

You're supposed to have somebody on the vessel who is in charge of safety and of overseeing the ship-to-ship transfer.

We don't know, of course, whether these were in place, but we certainly have some questions.

You know, you can see clearly, Titan is a very, very old boat.

It's 20-plus years old, look at it.

Rusty vessel, poorly maintained.

They carry about two million barrels of oil each.

I also see that someone is looking out and watching us from that deck up there.

Might be time to move now.

Let's go!

Yeah.

Yeah, good to go.

Full speed ahead.

We know that if there is a leak from a vessel like this, there's two million barrels of oil.

That's just a huge amount, and if you compare that to the very small spill that happened in Singapore earlier this year, that was 400 tons.

I mean, that's just an absolute tiny fraction of what these vessels carry.

As far as we know, almost nothing is being done to shut the flotilla down.

There's only so much that the Malaysian authorities, in particular the Coast Guard, can do with the resources they have.

They have many other maritime security challenges, illicit smuggling, people smuggling, illegal fishing.

This seemingly doesn't rank at the top of the list.

There is a big debate about how effective sanctions are and what sanctions effectiveness looks like.

In an ideal world, if sanctions were to be fully enforced, it would be very difficult for Iran to bring its oil to the market.

But in reality, it is quite difficult to trace.

But there are incentives not to entirely cut off Iran's oil supply.

It is in nobody's interest to completely stop or curb the flow of Iranian, Venezuelan, and also Russian crude to the market, because these are very, very big and important producers of oil.

So it is in nobody's interest to actually completely cut off this flow and send prices skyrocketing.

There are very few incentives for China to actively enforce U.S. sanctions.

China's economy is still struggling, the refunders' margins are poor, they have every incentive to keep buying cheaper Iranian crude.

It's arguable that the increased use of sanctions by the United States has actually created a new market that those companies and organizations that are willing to break and avoid the sanctions are able to exploit the waters of this region to conduct their business.

I don't think that sanctions are ineffective.

I do think that they take a very long time to be effective and they take a lot of work.

It depends on cooperation with countries, sharing of information, working together to ensure the overall safety of global trade and the shipping lanes, and especially the environment, and the seafarers themselves.

If there is an oil spill, then fully insured ships, we are also effectively uninsured.

And that is a big risk.

That makes the non-shadow fleet very scared and sceptical and rightly so.

My fellow Americans, we will be instituting the highest level of economic sanction.

The United States no longer makes empty threats.

Donald Trump, having re-imposed sanctions on Iran during his first term, has said he will renew his maximum pressure campaign to starve the country of the oil revenue it depends on.

This flotilla of aging tankers shows that's easier said than done.

When you have too many sanctions but not enough enforcement, the illicit actors will exploit that, they know that, and they will carry on with the activities.

And the illicit activities will grow and therefore the risks will grow.

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