Washington, September 2, 2025 — The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions on Tuesday targeting a sophisticated oil smuggling network accused of disguising Iranian oil as Iraqi crude to evade international sanctions.
The network, led by Iraqi-Kittitian businessman Waleed Khaled Hameed al-Samarra’i, has allegedly generated hundreds of millions of dollars annually for both Tehran and its partners by blending Iranian oil with Iraqi oil before marketing it abroad as solely of Iraqi origin.
Treasury Secretary Scott Bessent emphasized the strategic importance of the move, stating:
“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. 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.”
The Al-Samarra’i Network
Operating primarily from the United Arab Emirates, al-Samarra’i manages a network of shipping companies and shell corporations to conceal the origin of Iranian oil. His UAE-based firms — Babylon Navigation DMCC and Galaxy Oil FZ LLC — oversee shipping logistics and global trading, respectively.
The smuggling operation relies on a fleet of Liberia-flagged vessels, including the ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, and PAOLA. These ships allegedly engage in ship-to-ship transfers in the Arabian Gulf and Iraqi ports, often under the cover of night, with tactics such as AIS spoofing and suspicious location-reporting gaps to obscure their activities.
To further mask ownership, Babylon Navigation uses shell companies registered in the Marshall Islands, including Tryfo Navigation Inc., Keely Shiptrade Limited, Odiar Management S.A., Panarea Marine S.A., and Topsail Shipholding Inc.
The Treasury Department estimates that this network generates approximately $300 million annually for Tehran and its partners, contributing directly to Iran’s sanctioned petroleum sector.
Building on Previous Sanctions
This action follows OFAC’s July 3, 2025 sanctions on the network of Salim Ahmed Said, which was also accused of smuggling blended Iraqi and Iranian oil. Together, the measures underscore Washington’s ongoing effort to disrupt Iran’s shadow oil trade and diminish Tehran’s economic influence in Iraq.
The sanctions were issued under Executive Order 13902, which targets individuals and entities operating in Iran’s petroleum and petrochemical sectors.
Sanctions Implications
As a result of today’s designations, all property and interests in property of the sanctioned individuals and entities that are within U.S. jurisdiction are blocked. U.S. persons are generally prohibited from engaging in transactions with the sanctioned parties, and foreign financial institutions risk secondary sanctions if they knowingly facilitate significant transactions on behalf of designated individuals or companies.
Violations of U.S. sanctions may carry civil or criminal penalties, and OFAC warned that both U.S. and foreign persons could face consequences for dealings with designated entities.
