Investigation Reveals Myanmar Evaded US Sanctions by Masking Iranian Jet Fuel as Diesel

A coordinated evasion network allowed authorities in Naypyidaw to secure hundreds of thousands of barrels of restricted aviation fuel over the past year. By explicitly mislabeling the incoming cargo and obscuring its true origin, the military bypassed targeted embargoes designed to ground its air force.[1][2]

The deception involved a highly coordinated effort across multiple borders to disguise the shipments. In December 2025, the US-sanctioned tanker Reef arrived in Myanmar waters carrying approximately 113,000 barrels of Iranian jet fuel, backed entirely by sham paperwork designed to pass international scrutiny.[3][5]

The $15.8 million sales contract for that delivery was signed between Myanmar-based energy broker Dynamic Wave and Thailand’s Tawan-Oil Trading. The agreement falsely described the shipment as a legitimate purchase of South African diesel, a trade route that shipping analytics providers confirmed did not exist in 2025.[4][5]

The Mechanics of Evasion

The United States imposed targeted sanctions on Myanmar’s jet fuel industry in 2023 in direct response to the military’s deadly bombing campaign. Because buyers of Iranian oil and fuel also face the risk of extensive US sanctions, the dual evasion was necessary to maintain critical supply lines.[3][4]

The trade fraud was exposed through a combination of shipping records, satellite imagery, and commercial documents obtained from a briefly accessible junta-controlled server. Intelligence firm SynMax tracked the tanker’s journey from the Iranian port of Bandar Abbas directly to Southeast Asia, contradicting the official documentation.[3][5]

Military authorities were directly involved in orchestrating the ruse at the highest levels. A confidential letter dated November 30, 2025, revealed that Myanmar’s foreign exchange regulator explicitly authorized the mislabeling, instructing that the import documentation describe the delivery as diesel instead of jet fuel.[2][5]

The letter also authorized Dynamic Wave and its customer, National Energy Prime Aviation Services Company (NEPAS), to process the payment to the Thai trader. NEPAS is a joint venture between the regime-controlled Myanma Petrochemical Enterprise and the Asia Sun group, which dominates the aviation fuel supply chain.[2][5]

A Broader Pattern of Fraud

The December shipment was not an isolated incident, but rather part of a broader, systemic pattern of sanctions evasion. Between December 2024 and November 2025, the activist group Justice For Myanmar identified six separate imports of aviation fuel that utilized these exact evasive measures.[1][2]

In total, these six shipments covered more than 843,000 barrels of aviation fuel, valued at an estimated $109.5 million. The network utilized proxy companies to hide the cargo, the true importers, and the sources of funds, effectively shielding the trade from international regulators.[1][2]

An earlier transaction in May 2025 involved a contract for 202,000 barrels of fuel worth $26 million, which was also described as South African diesel. The tanker Noble subsequently arrived in Yangon carrying just under 200,000 barrels of jet fuel, with satellite analysis again tracing the shipment back to Iran.[5]

The financial transactions were routed through regional banking systems to further obscure the illicit trade. Contracts for the shipments specified that payments be directed into Tawan-Oil Trading’s account at Siam Commercial Bank in Thailand, raising questions about the role of regional financial institutions in facilitating the evasion.[5]

The Human Cost of Jet Fuel

The continued flow of aviation fuel has direct and devastating consequences on the ground in Myanmar. The military, which seized power from the elected government in a 2021 coup, relies heavily on airstrikes to combat a widespread armed resistance that has steadily gained territory.[1][4]

The United Nations reported in August that military air attacks have killed thousands of people, including large numbers of civilians. According to human rights monitors, airstrikes remained the leading cause of civilian casualties in Myanmar in 2025, with attacks frequently striking schools, hospitals, and religious buildings.[1][4]

Justice For Myanmar reported that the junta killed at least 982 civilians in airstrikes in 2025, including 232 children. This figure represents more children killed in aerial attacks in a single year than in the previous four years combined, underscoring the escalating intensity of the air campaign.[1]

Myanmar’s foreign ministry has previously responded to allegations of indiscriminate bombings by stating that the armed forces exercise utmost restraint to avoid harm to civilians. The regime maintains that its military operations are targeted solely at armed insurgents and groups it classifies as terrorists.[3][5]

The Limits of International Sanctions

The arrangement illustrates both the reach and the limitations of the current US sanctions regime. While the attempts to conceal the fuel’s origin suggest that sanctions have successfully raised the cost and complexity of transactions, Iranian jet fuel has ultimately continued to flow into the country.[3][5]

Human rights organizations argue that the regime's reliance on trade fraud demonstrates that international pressure is biting, but they stress that current measures are insufficient. Activists are calling on governments to expand sanctions to include the vessels, owners, and commercial managers involved in the shadow fleet.[1][2]

The findings are particularly significant as the United States has recently reopened limited diplomatic contacts with Myanmar’s military-backed government. The revelations raise immediate questions about how Washington will balance this tentative engagement with continued pressure over the military’s conduct and its access to restricted supplies.[5]

The involvement of regional intermediaries has also prompted calls for neighboring countries to take stronger action. Activists have urged Singapore and Thailand to block the Asia Sun group from operating within their jurisdictions and to launch formal investigations into the trade fraud facilitating the fuel shipments.[2]

As the conflict in Myanmar enters a new phase, the junta's ability to secure aviation fuel remains a critical factor in its military strategy. Without a coordinated international effort to close the loopholes in the sanctions regime, the shadow trade is likely to continue sustaining the aerial campaign.[1][3]