Iranian Oil “Disguised as Iraqi”: US Sanctions Iraqi-Kittitian Businessman | Iraq Business News

By John Lee.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on a network of shipping companies and vessels led by Iraqi-Kittitian businessman Waleed al-Samarra’i, accused of smuggling Iranian oil disguised as Iraqi-origin crude.

According to the Treasury, the network covertly blended Iranian oil with Iraqi oil and marketed it as solely Iraqi in order to bypass sanctions. The operation is reported to have generated hundreds of millions of dollars in revenue for both Iran and al-Samarra’i.

U.S. Treasury Secretary Scott Bessent stated:

“Iraq cannot become a safe haven for terrorists, which is why the United States is working to counter Iran’s influence in the country. 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.”

He reiterated Washington’s commitment to disrupting Tehran’s efforts to evade sanctions and ensuring that global oil supply chains remain free from Iranian oil.

Full statement from the U.S. Department of the Treasury:

Treasury Intensifies Pressure on Iranian Oil Smuggling and Sanctions Evasion Schemes in Iraq

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of shipping companies and vessels led by Iraqi-Kittitian businessman Waleed al-Samarra’i (al-Samarra’i) for smuggling Iranian oil disguised as Iraqi oil.  This network operates primarily by covertly blending Iranian oil with Iraqi oil, which is then marketed intentionally as solely of Iraqi origin to avoid sanctions. This scheme has generated hundreds of millions of dollars in revenue for both the Iranian regime and al-Samarra’i himself.

“Iraq cannot become a safe haven for terrorists, which is why the United States is working to counter Iran’s influence in the country,” said Secretary of the Treasury Scott Bessent. “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. We remain committed to an oil supply free from Iran and will continue our efforts to disrupt the ongoing attempts by Tehran to evade U.S. sanctions.”

Click here to watch a video from Secretary Bessent on today’s action.

Today’s action builds on OFAC’s July 3, 2025 sanctions targeting the network of Salim Ahmed Said, which also smuggled blended Iraqi and Iranian oil and generated significant revenue for the Iranian regime.  Collectively, these actions demonstrate the United States’ commitment to eliminating Iran’s pernicious influence on Iraq’s economy and upholding a campaign of maximum economic pressure on Iran, in accordance with National Security Presidential Memorandum-2. This action is being taken pursuant to Executive Order (E.O.) 13902, which targets those operating in certain sectors of the Iranian economy, including Iran’s petroleum and petrochemical sectors.

IRAN-IRAQ Network complicit in Iranian OIL SMUGGLING

Waleed Khaled Hameed al-Samarra’i (al-Samarra’i), a citizen of both Iraq and St. Kitts & Nevis, is a United Arab Emirates (UAE)-based businessman who runs a network of companies managing vessels that have been involved in the sale of Iranian oil to international markets. This network operates primarily by covertly blending Iranian oil with Iraqi oil, which is then marketed intentionally as solely of Iraqi origin.  Based on conservative estimates, al-Samarra’i’s network generates around $300 million of value to both Iran and its partners annually.

Al-Samarra’i relies on his two UAE-based companies, Babylon Navigation DMCC (Babylon) and Galaxy Oil FZ LLC (Galaxy Oil), to manage his network’s operations.  While Babylon handles the logistics and shipping aspects of al-Samarra’i’s operations, Galaxy Oil features as the main trader of al-Samarra’i’s energy products on the global market.

To smuggle the Iranian-origin oil, al-Samarra’i uses a group of vessels operated by Babylon-the Liberia-flagged ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, and PAOLA-to blend Iranian and Iraqi oil at sea, via ship-to-ship transfers in the Arabian Gulf, and in Iraqi ports.  While Babylon manages and operates these vessels, al-Samarra’i relies on a number of Marshall Islands-based shell companies-Tryfo Navigation Inc. (Tryfo), Keely Shiptrade Limited (Keely), Odiar Management S.A. (Odiar), Panarea Marine S.A. (Panarea), and Topsail Shipholding Inc. (Topsail)-to serve as the registered owners of these vessels and likely further obfuscate the extent of al-Samarra’i’s control over them.

To obscure their activity in smuggling Iranian oil, Al-Samarra’i’s vessels use ship-to-ship transfers with U.S.-sanctioned vessels publicly affiliated with Iran’s shadow fleet to distance themselves from direct interactions with the Iranian petroleum sector.  Iran’s network of tankers includes both Iranian and foreign-owned vessels that are used to evade international sanctions by concealing oil shipments.  Al-Samarra’i’s vessels also engage in other obfuscation techniques to hide their activities, such as unsafe ship-to-ship transfers at night, Automated Identification System (AIS) spoofing, and conspicuous gaps in AIS location reporting.

Al-Samarra’i and Babylon are being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy.

Galaxy Oil is being designated pursuant to E.O. 13902 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, al-Samarra’i.

The ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, and PAOLA are being identified pursuant to E.O. 13902 as property in which Babylon has an interest.

Tryfo, Keely, Odiar, Panarea, and Topsail are being designated pursuant to E.O. 13902 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Babylon.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.  In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.

Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons.  OFAC may impose civil penalties for sanctions violations on a strict liability basis.  OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions.  In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities involving designated or otherwise blocked persons.  The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

Furthermore, engaging in certain transactions involving the persons designated today may risk the imposition of secondary sanctions on participating foreign financial institutions.  OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a person who is designated pursuant to the relevant authority.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law.  The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.  For information concerning the process for seeking removal from an OFAC list, including the SDN List, or to submit a request, please refer to OFAC’s guidance on Filing a Petition for Removal from an OFAC List.

Click here for more information on the persons designated and any property identified as blocked today.

(Source: U.S. Department of the Treasury)