The U.S. Department of the Treasury’s Office of Foreign Assets Control announced on May 7 new sanctions targeting individuals and businesses connected to Iran and its proxy militias in Iraq, including Iraq’s Deputy Minister of Oil, Ali Maarij Al-Bahadly. The measures are aimed at curbing the diversion of Iraqi oil to benefit the Iranian regime and its affiliated groups.
These actions are significant because they address ongoing concerns about corruption in Iraq’s oil sector and efforts by Iran-aligned groups to undermine regional security. The United States said it will continue to hold accountable those responsible for attacks against U.S. personnel, civilians, diplomatic facilities, and businesses across Iraq.
“Treasury will not stand idly by as Iran’s military exploits Iraqi oil to fund terrorism against the United States and our partners,” said Secretary of the Treasury Scott Bessent. He added that “like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people.”
The designations were made under Executive Orders 13902 and 13224, which target sectors of Iran’s economy such as petroleum, as well as terrorist organizations or their supporters. Asa’ib Ahl Al-Haq was previously designated a Specially Designated Global Terrorist (SDGT) in 2020; Kata’ib Sayyid Al-Shuhada received similar designations in recent years.
Ali Maarij Al-Bahadly is accused of using his official positions within Iraq’s Ministry of Oil to enable illicit procurement and exportation rights for companies linked with sanctioned individuals such as Salim Ahmed Said. These operations allegedly involved forging documentation on oil provenance so that Iranian oil could be sold under an Iraqi label.
Other individuals designated include Mustafa Hashim Lazim Al-Behadili—an economic official for Asa’ib Ahl Al-Haq—and senior officials from Kata’ib Sayyid al-Shuhada who have coordinated weapons purchases with Hizballah associates.
As a result of these actions, all property belonging to designated persons within U.S. jurisdiction is blocked, along with any entities owned at least fifty percent by them. U.S. persons are generally prohibited from transactions involving these parties unless authorized by OFAC regulations.
Violations may lead to civil or criminal penalties for both U.S. citizens and foreign nationals engaging in prohibited transactions or attempting to evade sanctions rules. The Treasury also highlighted potential secondary sanctions on foreign financial institutions knowingly facilitating significant transactions on behalf of sanctioned parties.
