A fleet of aging tankers is transporting sanctioned oil around the globe — and it's becoming an insurance nightmare because nobody knows who owns them

• Pablo, a Gabon-flagged tanker carrying Iranian oil caught fire off the coast of Malaysia last week.
• It's throwing up concerns about a fleet of secretive tankers transporting sanctioned oil globally.

A fleet of aging tankers secretly transporting oil across the globe is becoming a cause for worry for two key reasons: we don't know who owns them, and we don't know who to go to for insurance purposes should they get into an accident.

The issue became evident last week when an oil tanker burst into flames off the coast of Malaysia.

Pablo, a Gabon-flagged oil tanker, caught fire in the South China Sea on May 1 after it spent two months at a shipyard in Shanghai. It has delivered an oil cargo to the eastern China province of Shandong before making its way to the shipyard, Bloomberg reported, citing ship-tracking data.

The ship was carrying Iranian crude, the outlet reported citing data from Vortexa, an analytics firm. The cause of the fire is unclear.

The fire has been put out, but authorities don't know who to approach for damages according to various media reports.

There's little information about Pablo Union Shipping, the Marshall Islands-registered shell company that owns the ship. The vessel also doesn't appear to be properly insured, Splash247.com, a maritime trade publication, reported on May 8 citing shipping databases.

On top of that, it is also unclear how the wreckage from the ship is being dealt with.

Oil from the ship has been washing up on Indonesia's coast, according to local authorities, the Jakarta Post reported on May 4. It's not immediately clear where the oil is from, although Pablo wasn't carrying cargo, Reuters reported on May 2, citing Malaysian maritime authorities.

More alarmingly, the vessel — which has changed ownership and flags several times in the last three years — has a history of shipping sanctioned Iranian oil, per Spash247.com.

The tale of Pablo comes just months after Reuters reported that new ship owners – predominantly from the Middle Eastern and Asia — have been snapping up aging oil tankers amid sky-high charter prices for tankers willing to transport Russian oil to India and China.

The two are now major buyers of the sanctioned fuel after the European Union kicked off its import ban on seaborne Russian crude on December 5.

Russia itself has also put together a "shadow fleet" of more than 100 oil tankers in a bid to skirt Western sanctions, the Financial Times reported in December.

Such old ships are spurring concerns among nations on the Baltic Sea as they are at risk of getting into catastrophic accidents, oil spills, and engine failures out at sea, the Washington Post reported last month.

That's because these vessels that carry sanctioned oil have few options to get maritime insurance — an industry that is dominated by Western companies

"If an accident happens, there is nothing we can do about it," Paul Jennings, the co-managing director of the NorthStandard P&I club told Splash247.com earlier this year.

The Malaysian and Indonesian maritime authorities did not immediately respond to Insider's request for comment.