US sanctions Iraq’s deputy oil minister

8 May 2026

The US has sanctioned Iraq’s Deputy Oil Minister Ali Maarij Al-Bahadly, in another blow for the country’s oil and gas sector.

In a statement released by the US Treasury, it said that he “abuses his position to facilitate the diversion of oil to be sold for the benefit of the Iranian regime and its proxy militias in Iraq”.

The US Department of the Treasury’s Office of Foreign Assets Control (Ofac) has also designated three senior leaders of the militias Kata’ib Sayyid Al-Shuhada and Asa’ib Ahl Al-Haq. 

In its statement, it said that the US will continue to hold these groups and other militias in Iraq, such as Kata’ib Hizballah, accountable for their attacks against US personnel and civilians, diplomatic facilities and businesses across Iraq.

Secretary of the Treasury, Scott Bessent, said: “Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people.”

He added: “Treasury will not stand idly by as Iran's military exploits Iraqi oil to fund terrorism against the United States and our partners.”

Ofac said that it designated Iraq’s deputy minister of oil on 7 May because he had been “instrumental in facilitating the diversion of Iraqi oil products to benefit known Iran-affiliated oil smuggler Salim Ahmed Said, as well as Iran-backed terrorist militia Asa’ib Ahl Al-Haq (AAH)”.

It added: “For years, 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, AAH, and by extension, Iran.”

The US Treasury said that it designated Said in June 2025 for running a network of companies selling Iranian oil falsely declared as Iraqi oil to avoid sanctions.

In its statement, it said: “Integral to this operation was Said’s ability to obtain favoured access to Iraqi oil and procure forged documentation from Iraqi government officials, legitimising illicit oil.

“To that end, Said was responsible for bribing complicit officials in the Iraqi government, as well as reportedly installing Maarij in his official position.”

Since 2018, Maarij has held several positions in Iraq’s Oil Ministry, including head of the licensing and contracts office, deputy minister, and acting oil minister. 

The US Treasury said that, in his official capacities, Maarij enabled Said to illicitly procure oil products by granting exportation rights to Said’s companies. 

It claimed that Maarij authorised trucking several million dollars’ worth of oil a day from the Qayarah oil field to VS Oil Terminal in Khor Zubayr for export.

The US sanctioned VS Oil Terminal in July last year.

The US Treasury said that VS Oil oversaw the mixing of Iranian oil with Iraqi oil before being shipped to market. 

It also said that Maarij is also responsible for falsifying documentation on the provenance of oil for Said’s network, enabling it to be smuggled to market disguised as purely Iraqi oil.

Neither Iraq nor Iran has responded to the announcement of the new sanctions.

The sanctions were announced as the US and Iran battle over control of the Strait of Hormuz, which has seen significant disruption to shipping since the US and Israel started their war with Iran on 28 February 2026.

Iraq’s oil and gas sector is currently going through a crisis due to the disruption to shipping through the Strait of Hormuz, which has caused the country’s oil exports to collapse.


READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:

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Wil Crisp
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