The U.S. Treasury Department on September 2, unveiled sweeping sanctions against a clandestine oil-smuggling network that secretly blended Iranian oil with Iraqi crude and sold it as solely Iraqi in origin. The effort is aimed at choking off crucial revenue streams that fund Iran’s destabilizing activities, including those threatening American interests and allies.
The operation was orchestrated by Waleed Khaled Hameed al-Samarra’i, a businessman holding dual citizenship in Iraq and St. Kitts & Nevis, operating out of the UAE through his companies, Babylon Navigation DMCC and Galaxy Oil FZ LLC. Treasury officials estimate his network generates around $300 million annually for Iran and its partners.
Nine Liberia-flagged tankers including names such as Adena, Liliana, Camilla, Delfina, Bianca, Roberta, Alexandra, Bellagio, and Paola, served as the primary vessels used in this scheme. These ships conducted ship-to-ship transfers both at sea and in Iraqi ports to disguise the oil’s Iranian origin.
To further obfuscate the chain of ownership, al-Samarra’i utilized several Marshall Islands-registered shell companies—Tryfo Navigation, Keely Shiptrade Limited, Odiar Management S.A., Panarea Marine S.A., and Topsail Shipholding Inc.—as nominal owners of the vessels.
These ships also coordinated with Iran’s “shadow fleet”, a network of vessels used to evade international sanctions by conducting transfers at sea, often at night, while employing deceptive techniques like disabling navigational transponders and spoofing location signals to avoid detection.
The scorched-earth sanctions package freezes all assets tied to al-Samarra’i, Babylon, Galaxy Oil, the vessels, and the shell companies within U.S. jurisdiction. It also strictly prohibits U.S. entities from any dealings with them.
Secretary of the Treasury Scott Bessent emphasized the broader security rationale behind the move: “Iraq cannot become a safe haven for terrorists… By targeting Iran’s oil revenue stream, Treasury will further degrade the regime’s ability to carry out attacks against the United States and its allies,” adding that the U.S. remains “committed to an oil supply free from Iran” and will persist in efforts to thwart sanctions evasion.
