The United States has imposed sanctions on nine tankers allegedly involved in disguising Iranian oil exports as Iraqi crude. According to S&P Global Commodities at Sea (CAS), these vessels transported more than 16 million barrels of crude and petroleum products from Iraqi ports since the start of 2024.
The move underscores Washington’s continued efforts to curb Tehran’s shadow oil trade, which is estimated to generate $300 million annually for Iran and its partners.
Sanctions Target Shipping Network and Companies
On September 2, the US Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against the tankers, UAE-based businessman Waleed Khaled Hameed al Samarra’i, and his companies Babylon Navigation and Galaxy Oil. OFAC accused the network of engaging in oil smuggling operations using ship-to-ship (STS) transfers to obscure links with Iranian petroleum.
CAS data shows that the sanctioned vessels have carried:
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5.09 million barrels of oil of “unknown origin” loaded in Iraq this year.
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1.10 million barrels of naphtha and fuel oil making up the remainder.
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Most cargoes destined for the UAE or for domestic transshipments within Iraq, with one Suezmax delivering crude to India.
Disguised Oil Flows and Wider Crackdown
The US alleges that Samarra’i’s fleet re-exports Iranian oil under false Iraqi origin, in coordination with Iran’s sanctioned “shadow fleet.” This mirrors earlier sanctions against Salim Ahmed Said, accused in July of similar schemes.
The crackdown comes as Europe also reintroduces sanctions against Tehran, with France, Germany, and the UK increasing enforcement. CAS data reveals:
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44.8 million barrels of crude were loaded from Iran in August 2024.
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107 million barrels were shipped from Iraq, of which 1.1 million barrels were labeled “unknown origin.”
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Iraq’s exports rose slightly to 3.33 million b/d in July, with China and India remaining the largest buyers.
The latest US sanctions highlight growing scrutiny of disguised oil shipments and shadow networks that blur the line between Iranian and Iraqi crude.
While the measures are aimed at tightening restrictions on Iran’s oil revenue, the enforcement also adds pressure on regional traders and shippers navigating between legitimate Iraqi exports and sanctioned flows. With both Washington and European powers stepping up oversight, the shadow trade faces an increasingly narrow operating space.
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Source: SP Global
