The U.S. Treasury Department is planning to impose sanctions on an Iraqi Deputy Oil Minister on Thursday, accusing him of involvement in a scheme to blend Iranian crude oil with Iraqi crude. This practice is alleged to help Iran circumvent international embargoes and sell its oil.
The Treasury Department is set to announce that Deputy Oil Minister Ali Maarij al-Bahadli approved the daily trucking of Iraqi crude oil, worth millions of dollars, to a smuggler. The smuggler would then mix it with Iranian crude. The Treasury stated that al-Bahadli also assisted in forging documents to present the blended crude as purely Iraqi oil for smuggling into the market.
This action signals the U.S. government's increasing pressure on Baghdad to sever its economic ties with Tehran. Iran has long used its status as Iraq's neighbor to bypass international sanctions and obtain hard currency. It is rare for the U.S. Treasury to sanction a senior foreign official, particularly from Iraq, a nation with which the U.S. has a long-standing relationship.
Iraq is currently in a transitional government period. Prime Minister-designate Ali al-Zaidi is forming a new cabinet and seeking support from the Iraqi parliament, which must vote to approve his nominees before he can formally take office.
In recent weeks, the U.S. has enforced a maritime blockade near the Persian Gulf, intercepting tankers carrying Iranian oil, and has taken severe action against shipping companies and shell firms in the region accused of helping Iran evade sanctions.
The U.S. Treasury will also allege that al-Bahadli diverted Iraqi crude to the Hezbollah Brigades, an Iran-backed militia. The Treasury will announce sanctions against three leaders of the Hezbollah Brigades, as well as against another Iran-aligned militia, the Saraya al-Salam (Sa'id Martyrs Brigade).
U.S. authorities claim that al-Bahadli arranged for crude to be diverted to Iraqi businessman Salim Ahmed al-Sa'id. This individual was already placed on a U.S. sanctions list last year for smuggling blended Iran-Iraq crude. The Treasury stated that al-Bahadli also granted oil export rights to several companies owned by al-Sa'id.
Al-Bahadli previously served as chairman of the Iraqi parliament's oil and gas committee and was appointed Deputy Oil Minister in 2024. U.S. allegations state that businessman al-Sa'id bribed Iraqi government officials and was involved in efforts to secure al-Bahadli's current appointment.
In 2024, al-Bahadli temporarily assumed the daily operations of the Oil Ministry while Minister Hayan Abdul Ghani was hospitalized.
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