US Sanctions Iraq's Deputy Oil Minister and Militia Leaders for Helping Iran Evade Oil Sanctions

May 7, 2026

The US Treasury sanctioned Iraq's Deputy Oil Minister Ali Maarij al-Bahadly and several pro-Iran militia leaders for facilitating Iranian oil sales that violate US sanctions imposed in 2018. The scheme involves labeling Iranian oil as Iraqi and using forged documents, generating at least $1 billion annually for Iran, whose oil revenues account for 80 percent of exports and a quarter of its state budget. Iraq's Oil Minister acknowledged in March that Iranian tankers used fraudulent Iraqi documents, highlighting the challenge facing Baghdad as it's governed by the pro-Iranian Coordination Framework bloc. The sanctions represent continued US pressure on Iraq to distance itself from Tehran, with President Trump previously threatening to withdraw support if pro-Iran politician Nouri al-Maliki became prime minister.

US Sanctions on Iraqi Officials and Militia Leaders

▪The US Treasury alleged that Mustafa Hashim Lazim al-Behadili controlled oil smuggling financing and dealt directly with Iran and the Islamic Revolutionary Guard Corps' Quds Force.
▪Ali Maarij al-Bahadly has overseen Iraqi oil governance for years, first as head of the Iraqi parliament's oil and gas committee.
▪The US Treasury sanctioned Iraq's Deputy Oil Minister Ali Maarij al-Bahadly for helping Iran sell oil in violation of US sanctions.
▪Ali Maarij al-Bahadly has been Iraq's Deputy Oil Minister since 2024.
▪The US Treasury sanctioned Ahmed Khudair Maksus Maksus and Mohammed Issa Kadhim al-Shuwaili, both senior officials within the pro-Iran Kata'ib Sayyid al-Shuhada.
▪The US Treasury sanctioned Mustafa Hashim Lazim al-Behadili, described as a leader and economic official for the Iran-backed Asa'ib Ahl al-Haq movement.
▪Ahmed Khudair Maksus Maksus and Mohammed Issa Kadhim al-Shuwaili were accused of being involved in illicit weapons purchases.

Iran's Use of Iraq to Evade Oil Sanctions

▪Donald Trump imposed oil sanctions on Iran in 2018 during his first presidential term after withdrawing from the nuclear deal with Tehran.
▪Iraq's Oil Minister Hayan Abdel-Ghani said in March that Iranian oil tankers had used forged Iraqi documents while attempting to avoid US sanctions.
▪Iran is believed to generate at least $1 billion a year from an oil smuggling network that diverts Iranian fuel from Iraqi asphalt plants and blends it with Iraqi oil before exporting it as purely Iraqi.

Iraq's Balancing Act Between Iran and the United States

▪Donald Trump warned earlier in 2025 that Washington would stop support for Iraq if pro-Iran Nouri al-Maliki became Iraq's prime minister.
▪Donald Trump has backed Ali al-Zaidi as the new Iraqi Prime Minister-designate.
▪Many of Iraq's current leaders lived in Iran, particularly before 2003 and the overthrow of Saddam Hussein in the US-led invasion.

Perspective of Iran

▪Iran depends on Iraqi oil smuggling networks to generate at least $1 billion annually in sanctions-evading revenue.

Perspective of Iraq's Coordination Framework bloc

▪Donald Trump's threat to withdraw US support if Nouri al-Maliki became prime minister directly targeted the Coordination Framework's leadership choices.