Washington Targets Iraq Oil Network Over Alleged Iran Support

The United States has imposed fresh sanctions on Iraq’s deputy oil minister and several Iran-aligned militias, accusing them of helping Tehran finance its regional operations through oil smuggling and illicit financial networks.

The sanctions, announced Thursday by the U.S. Treasury Department, target Iraq’s Deputy Oil Minister Ali Maarij Al-Bahadly, whom Washington alleges used his official position to divert Iraqi oil for the benefit of Iran and armed proxy groups operating in Iraq.

According to the Treasury Department, Al-Bahadly allegedly facilitated the movement of millions of dollars’ worth of oil from Iraq’s Qayyarah oil field, allowing it to be blended with Iranian crude and sold on international markets as Iraqi oil in an attempt to bypass sanctions on Tehran.

The U.S. also sanctioned senior figures linked to the Iran-backed militias Asa’ib Ahl al-Haq and Kata’ib Sayyid al-Shuhada, groups Washington accuses of carrying out attacks against U.S. personnel and interests in Iraq.

U.S. Treasury Secretary Scott Bessent said the measures are part of the administration’s “maximum pressure” campaign aimed at weakening Iran’s ability to fund militant activities across the Middle East. Treasury officials accused Tehran of exploiting Iraq’s oil wealth to finance terrorism and destabilize the region.

The sanctions freeze any U.S.-based assets belonging to the targeted individuals and entities and prohibit American companies or citizens from conducting business with them. Foreign firms that continue dealing with sanctioned actors could also face secondary sanctions.

The Iraqi government has not yet issued an official response to the accusations. The move, however, is expected to increase tensions between Washington and Tehran at a time of heightened regional instability and ongoing negotiations surrounding Iran’s nuclear and regional activities.