US sanctions on Iran oil smuggling threaten to hinder Iraq's investment drive

Iraqi News

11 hours ago

Baghdad (IraqiNews.com) – A new wave of intensified U.S. sanctions targeting Iranian oil smuggling networks is threatening to create significant collateral damage for Iraq's own economic ambitions, according to a recent report by the energy-focused American website OilPrice.com. The analysis suggests that as Washington escalates its 'maximum pressure' campaign against Tehran, Iraqi entities and infrastructure are being caught in the crossfire, potentially hindering Baghdad's efforts to attract international investment.
This new phase of sanctions comes just weeks after a hypothetical second Trump administration conducted major military strikes on Iranian nuclear facilities. The U.S. Treasury Department has now designated over 30 new entities, individuals, and vessels involved in what it calls an illicit, multi-billion-dollar trade network.
The report highlights that the sanctions focus on a network allegedly run by British-Iraqi citizen Salim Ahmed Saeed. According to the U.S. Treasury's Office of Foreign Assets Control (OFAC), this network has been smuggling Iranian oil by disguising it as or mixing it with Iraqi oil since at least 2020.
Specific Iraqi-linked assets have been targeted, including the VS Oil Terminal at Iraq's Khor Al-Zubair port, which is owned by Saeed. The U.S. also noted ship-to-ship transfers occurring near this terminal and pointed to the routine use of forged documents to mask the oil's origin. The sanctions also named the Marshall Islands-flagged tanker 'Dijla' and other UAE-based companies and vessels involved in the network, some of which facilitated sales for Iran's IRGC-Quds Force.
For Iraq, the implications are severe. The OilPrice.com report argues that while Baghdad is actively trying to boost cooperation and investment with the West, sanctions that include Iraq-linked operators can make international investors wary of entering the country's vital oil, gas, and port sectors.
This development adds another layer of instability to an already complex situation. Iraq is still navigating its own energy needs, internal political dynamics including the federal-KRG oil dispute, and the presence of armed factions. The broader U.S.-Iran conflict directly exacerbates these political and economic uncertainties.
The report frames Washington's actions as a dual strategy under a second Trump administration: first, to exert maximum economic pressure on Tehran to force negotiations, and second, to actively attempt to pull Iraq into the Western sphere of influence, countering the growing regional roles of China and Russia.
Ultimately, Iraq finds itself in a perilous position—geographically and economically tied to Iran, yet seeking the Western investment necessary for its development. Navigating this geopolitical minefield will be a critical challenge for Baghdad as it tries to pursue its own national interests amidst a major regional power struggle.