Iraqi-Kittitian network penalized for petroleum smuggling valued at $300 million, allegedly linked to Iranian interests

The U.S. Treasury Department has imposed sanctions on an oil smuggling network led by Waleed Khaled Hameed al-Samarra'i, based in the United Arab Emirates. The network, which is marketed as purely Iraqi oil to circumvent international sanctions, has been accused of using covert blending operations to mix Iranian oil with Iraqi crude.

Al-Samarra'i manages the operation through two UAE-based companies: Babylon Navigation DMCC and Galaxy Oil FZ LLC. The network uses nine Liberia-flagged vessels for the blending operations, which are registered as owners through five Marshall Islands-based shell companies to obscure ownership. These shell companies are linked to al-Samarra'i's oil smuggling network, but specific individual or company names publicly connected to these entities are not clearly disclosed in available sources.

The sanctions aim to further degrade the regime's ability to carry out attacks against the United States and its allies, and to prevent American citizens and companies from conducting business with the network. The sanctions freeze all U.S.-based assets of the designated individuals and entities. Foreign financial institutions risk secondary sanctions for facilitating transactions with the network.

The sanctioned network generates approximately $300 million annually for Iran and its partners. The vessels in the sanctioned network conduct ship-to-ship transfers with U.S-sanctioned tankers affiliated with Iran's shadow fleet. The blending operations take place through ship-to-ship transfers in the Arabian Gulf and at Iraqi ports.

Tuesday's action builds on Treasury sanctions imposed in July targeting a similar network led by Salim Ahmed Said. The U.S. Treasury Department states that Iraq cannot become a safe haven for terrorists and is working to counter Iran's influence in the country.

Iran's President Pezeshkian has signed a law suspending IAEA cooperation, adding to the tension in the region. However, Türkiye backs Iran's nuclear negotiations, as stated by President Erdogan at the SCO summit.

The U.S. sanctions come as part of Executive Order 13902, which targets operators in Iran's petroleum and petrochemical sectors as part of a "maximum economic pressure" campaign against Tehran. The order prohibits American citizens and companies from conducting business with the network.

The U.S. sanctions are part of a broader effort to counter Iran's oil smuggling operations, which are used to evade international sanctions by concealing oil shipments. The U.S. Treasury Department warns that the sanctions will remain in place until Iran's nuclear programme is fully addressed and the regime ceases its destabilising activities in the Middle East.