SINGAPORE: The United States sees Iran's capacity to move its oil as reliant on service providers based in Malaysia, with oil being transferred near Singapore and throughout the region, a senior U.S. Treasury official said on Tuesday.

The U.S. Treasury is increasing its focus on financing for groups routed through Southeast Asia, including through fundraising efforts and illicit sales of Iranian oil.

The official told reporters in a background briefing that the United States was trying to prevent Malaysia from becoming a jurisdiction where the Palestinian group Hamas could both fundraise and then move money.

"We are concerned about Hamas' capacity to fundraise in the region, including in Malaysia, so want to have a direct conversation about those concerns," the official said.

The official said there was a "concerning uptick" in attempts by Iran and its proxies to raise funds in the region, sometimes through charities.

"It's appalling that they seek to take advantage of the outpouring of support for the Palestinian people to siphon money for their violent and destabilizing activities," said the official, while declining to name the suspect charities.

Brian Nelson, the Under Secretary of the Treasury for Terrorism and Financial Intelligence and Neil MacBride, Treasury General Counsel, are in Singapore and Malaysia from Monday until Thursday.

The department said the visit was to advance its work in countering financing and revenue generation by Iran and its proxies.

The official said the United States saw Iranian oil being transferred near Singapore and throughout the region.

"The capacity of Iran to move its oil has relied on sort of these types of service providers that are based in Malaysia. So we want to have direct conversation with Malaysians about that."

Last December, the U.S. Treasury imposed sanctions on four Malaysia-based companies it accused of being fronts supporting Iran's production of drones.

The official also said sanctions and export controls against Russia were seeing progress, adding the Russian oil price cap was reducing Moscow's capacity to profit from oil sales while preserving the stability of global energy markets.

Singapore is a major shipping hub. Insurance and other maritime service providers operating in Singapore have warned of evasion of the price cap on Russian oil, complaining that it is difficult to confirm whether paperwork promising oil is bought at or below the $60 cap is accurate.