US sanctions Iraq’s deputy oil minister over facilitating Iran oil sales

ERBIL, Kurdistan Region - The US Treasury Department on Thursday sanctioned Iraqi Deputy Oil Minister Ali Maarij al-Bahadly for allegedly facilitating the “diversion of oil to be sold for the benefit of the Iranian regime and its proxy militias in Iraq.”

The move comes as Washington intensifies pressure on Baghdad to disarm and dismantle Iran-backed groups operating within the state-sponsored Popular Mobilization Forces (PMF).

The Treasury said Bahadly was designated “for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Salim Ahmed Said.”

The US sanctioned Iraqi-British businessman Said in June 2025, accusing him of using fraudulent documentation, ship-to-ship transfers, and oil blending operations to disguise Iranian oil as Iraqi crude - allegations Iraqi authorities denied.

“Maarij has used his official positions - first as the head of the Iraqi parliament’s oil and gas committee, and then within the Iraq Ministry of Oil - to enrich Said, Asa’ib Ahl al-Haq (AAH), and by extension, Iran,” the Treasury said in Thursday’s statement.

In addition to Bahadly, three leaders affiliated with PMF factions were added to the Specially Designated Nationals and Blocked Persons List (SDN List).

Those sanctioned include Mustafa Hashim Lazim al-Behadili, an official within AAH, as well as Ahmed Khudair Maksus Maksus and Issa Kadhim al-Shuwaili of Kata’ib Sayyid al-Shuhada (KSS).

The groups are part of Iraq’s ruling Shiite-led Coordination Framework and have long been labeled by Washington as Iranian proxies.

The US placed a $10 million bounty on KSS leader Abu Ala al-Walai in April, while AAH leader Qais al-Khazali has also long been under US sanctions.

In a January phone call with outgoing Iraqi Prime Minister Mohammed Shia al-Sudani, US Secretary of State Marco Rubio said that “a government controlled by Iran cannot successfully put Iraq’s own interests first, keep Iraq out of regional conflicts, or advance the mutually beneficial partnership between the United States and Iraq.”

US concerns over Iran-backed armed groups escalated during the nearly six-week war with Iran between February 28 and April 8. During the conflict, factions within the PMF operating under the banner of the “Axis of Resistance” launched more than 600 attacks on US facilities in Iraq and across the region.

Washington has repeatedly labeled the groups as “terrorist Iranian militias” and called on Baghdad to disarm and dissolve them.

While the Iraqi government has consistently stressed the need to restrict weapons to state control and pledged to integrate armed factions into official institutions, the PMF remains a state-sponsored force. Baghdad has also condemned US strikes on PMF bases and authorized the groups to respond.

The US State Department said Wednesday there remains a “blurry line” between the Iraqi state and armed militias, adding that Washington expects “actions, not words” from Baghdad to remove Iran-backed factions from state institutions and cut off their access to public funds.

“Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people,” Treasury Secretary Scott Bessent said on Thursday, adding that the Treasury “will not stand idly by as Iran's military exploits Iraqi oil to fund terrorism against the United States and our partners.”