U.S. Treasury Sanctions Iraqi Deputy Oil Minister and Several Iran-Linked Figures for Alleged Oil Smuggling

U.S. Treasury Department sanctioned Iraq’s Deputy Minister of Oil Ali Maarij al-Bahadly, senior leaders of Kata’ib Sayyid Al-Shuhada and Asa’ib Ahl Al-Haq (AAH), and several related companies on May 7, 2026. FDD reported the sanctions in its policy brief titled 'Iraqi Corruption Is Fueling Iranian Sanctions Evasion,' published on May 12, 2026.

The department stated that the sanctions highlight AAH’s role in Iranian sanctions evasion, specifically oil smuggling. U.S. Treasury Department.

Corrupt Iraqi officials provide Iran and militia-linked actors with preferential access to Iraqi oil. Corrupt and pro-Iranian officials in Iraq provide falsified paperwork that obscures the oil’s Iranian origin. Oil smuggling nets $1 billion per year for the regime and its proxies, FDD reported.

Salim Ahmed Said, an Iraqi oil smuggler designated in July 2025 for smuggling on behalf of Iran, reportedly paid millions of dollars in kickbacks to Iraqi officials in exchange for forged vouchers. U.S. Treasury Department had previously detailed those payments when it sanctioned Said.

-designated Foreign Terrorist Organization. S. U.S. Embassy in Baghdad and across the Gulf, FDD reported. The sanctions follow Washington’s suspension in April 2026 of roughly $500 million in physical dollar shipments to Baghdad.

U.S. State Department. The sanctions appear designed in part to warn Prime Minister-designate Ali al-Zaidi against elevating pro-Iranian, terrorist-linked politicians in the cabinet he is now forming. Zaidi’s backers include AAH-affiliated politicians.

Initial reports indicate that Iraq’s next oil minister will be selected from a party in the Coordination Framework, the Iran-aligned coalition of Shiite parties that nominated Zaidi. Deputy ministers like Maarij could still be elevated even though deputy minister and director general-level officials have played crucial roles in enabling illicit activity for Iran while maintaining a lower public profile.

The new cabinet will reportedly not retain any current ministers.

FDD reported that Iran-backed militias work through politicians, front companies, and oil smugglers to siphon billions of dollars from the Iraqi people each year. Max Meizlish is a CEFP Research Fellow at FDD. Bridget Toomey is a Research Analyst at FDD.

FDD reported that Treasury should continue targeting Iranian-linked militias, their commercial infrastructure, and the corrupt political networks that enable them. -designated FTOs and other Iran-backed militias.

U.S. sanctions given Baghdad’s role in funding the PMF. U.S. Parties. Targeted enforcement against pro-Iranian politicians, ideally involving their extradition to the United States, would weaken Iran’s influence networks in Iraq.