U.S. Treasury sanctions Iraqi oil official, Iran-backed militias over oil smuggling, terror financing

Crime Diary, International

WASHINGTON, U.S. (NPA) — The United States Department of the Treasury has announced sweeping sanctions targeting Iraq’s oil sector and senior figures linked to Iran-backed militias, accusing them of diverting Iraqi oil revenues to finance terrorism and destabilising activities across the Middle East.

In a statement issued on Thursday, the Treasury Department’s Office of Foreign Assets Control (OFAC) said the sanctions form part of Washington’s intensified “Economic Fury” campaign aimed at increasing economic pressure on Iran and disrupting its regional proxy networks.

Among those sanctioned is Ali Maarij Al-Bahadly, Iraq’s Deputy Minister of Oil, who U.S. authorities accused of abusing his office to facilitate the diversion and smuggling of Iraqi oil for the benefit of Iran and allied militia groups operating in Iraq.

The Treasury Department also sanctioned senior figures linked to the Iran-aligned militias Asa’ib Ahl Al-Haq and Kata’ib Sayyid al-Shuhada, both of which Washington has designated as terrorist organisations.

U.S. Treasury Secretary Scott Bessent accused the Iranian Government of exploiting Iraq’s natural resources to fund militant operations.

“Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people,” Bessent said.

“Treasury will not stand idly by as Iran’s military exploits Iraqi oil to fund terrorism against the United States and our partners.”

According to OFAC, Maarij allegedly used several official positions within Iraq’s oil sector, including his former role as head of the Iraqi parliament’s oil and gas committee, to support a network controlled by oil smuggler Salim Ahmed Said.

U.S. authorities claimed the network mixed Iranian crude with Iraqi oil and exported it using forged Iraqi government documentation to evade international sanctions.

The Treasury Department alleged that millions of dollars worth of oil were transported daily from Iraq’s Qayarah oil field to export terminals linked to the smuggling operation.

Washington also accused militia-linked economic officials of using front companies, government contracts, and the oil trade to finance armed groups and coordinate activities with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), which the United States classifies as a terrorist organisation.

Among those designated is Mustafa Hashim Lazim Al-Behadili, also known as Sayyid Awn, described by the U.S. as a senior economic official within Asa’ib Ahl Al-Haq.

The Treasury Department further announced sanctions against four Iraqi companies allegedly controlled by Al-Behadili and operating in the country’s oil and transport sectors.

Additional sanctions were imposed on senior officials of Kata’ib Sayyid al-Shuhada, including Ahmed Khudair Maksus Maksus and Mohammed Issa Kadhim al-Shuwaili, whom U.S. authorities accused of facilitating weapons procurement and coordinating financial transactions with members of the Lebanese group Hezbollah.

Under the sanctions, all assets and financial interests belonging to the designated individuals and entities within U.S. jurisdiction are to be frozen, while American citizens and businesses are prohibited from engaging in transactions with them.

The Treasury Department warned that foreign financial institutions and companies doing business with sanctioned individuals or entities could also face secondary sanctions and restrictions under U.S. law.

Washington said the measures are part of broader efforts by the administration of President Donald Trump to block Iran’s access to revenue streams used to fund militant operations and regional influence networks.