Newsletters
The U.S. Treasury Department on Tuesday sanctioned an extensive oil smuggling network led by an Iraqi-Kittitian businessman that has generated hundreds of millions of dollars for Iran by disguising Iranian crude as Iraqi oil, officials said.
The sanctions target Waleed Khaled Hameed al-Samarra'i, a dual citizen of Iraq and St. Kitts & Nevis based in the United Arab Emirates, along with his network of shipping companies and nine vessels used in the operation. The Treasury estimates the network generates approximately $300 million annually for Iran and its partners.
"Iraq cannot become a safe haven for terrorists, which is why the United States is working to counter Iran's influence in the country," Treasury Secretary Scott Bessent said in a statement. "By targeting Iran's oil revenue stream, Treasury will further degrade the regime's ability to carry out attacks against the United States and its allies."
The scheme operates by covertly blending Iranian oil with Iraqi crude through ship-to-ship transfers in the Arabian Gulf and at Iraqi ports, then marketing the mixed product as purely Iraqi oil to circumvent international sanctions, according to the Treasury's Office of Foreign Assets Control.
Al-Samarra'i manages the operation through two UAE-based companies: Babylon Navigation DMCC, which handles logistics and shipping, and Galaxy Oil FZ LLC, which trades the energy products on global markets. The network uses nine Liberia-flagged vessels — the ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, and PAOLA — to conduct the blending operations.
To obscure ownership, al-Samarra'i relies on five Marshall Islands-based shell companies to serve as registered owners of the vessels, Treasury officials said. The ships employ various concealment techniques including nighttime transfers, manipulation of automated identification systems, and deliberate gaps in location reporting.
The vessels also conduct ship-to-ship transfers with U.S.-sanctioned tankers affiliated with Iran's shadow fleet — a network of Iranian and foreign-owned vessels used to evade international sanctions by concealing oil shipments.
Tuesday's action builds on Treasury sanctions imposed in July targeting a similar network led by Salim Ahmed Said, which also smuggled blended Iraqi and Iranian oil.
The sanctions freeze all U.S.-based assets of the designated individuals and entities and prohibit American citizens and companies from conducting business with them. Foreign financial institutions risk secondary sanctions for facilitating transactions with the network.
The Treasury action was taken under Executive Order 13902, which targets operators in Iran's petroleum and petrochemical sectors as part of what officials call a "maximum economic pressure" campaign against Tehran.
1 min read
1 min read
