The US Treasury Department on Tuesday sanctioned a network of shipping companies and vessels for smuggling Iranian oil disguised as Iraqi oil.
The sanctions are the latest to come from the US as the administration of President Donald Trump aims to keep pressure on Iran while nuclear talks between the two countries have stalled. They held five rounds of negotiation earlier this year, but a sixth round of negotiations was suspended after the US joined in Israel’s June attack on Iran’s nuclear program. The US has subsequently ramped up sanctions on Iran.
A senior Iranian official said on Tuesday that the path to nuclear negotiations is not closed, but said US demands for curbs on Iranian missiles are obstructing prospects for talks. Three European nations also began a 30-day process of instituting sanctions on Iran last week after they said not enough progress had been made in talks.
The US Treasury said the network sanctioned on Tuesday, run by a businessman who is a citizen of Iraq and St. Kitts & Nevis and is based in the United Arab Emirates, operates primarily by covertly blending Iranian oil with Iraqi oil, which is then marketed intentionally as solely of Iraqi origin to avoid sanctions.
“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,” US Treasury Secretary Scott Bessent said in a statement.
“We remain committed to an oil supply free from Iran and will continue our efforts to disrupt the ongoing attempts by Tehran to evade US sanctions,” he said.
Iran’s mission to the United Nations in New York did not immediately respond to a request for comment.
The Treasury Department said it designated the businessman and Babylon Navigation DMCC, one of two UAE-based companies he runs that manage the network’s operations, and several vessels for being owned or having worked directly or indirectly on behalf of Babylon.
The department identified several Liberia-flagged tankers, including the Adena, Liliana and Camilla, as property in which Babylon has an interest. The department said the tankers helped the network blend Iranian and Iraqi oil at sea, via ship-to-ship transfers in the Arabian Gulf, and in Iraqi ports.
The US Treasury also designated several Marshall Islands-based companies, including Tryfo Navigation, Keely Shiptrade Limited, Odiar Management S.A., Panarea Marine S.A. and Topsail Shipholding Inc., that it said served as registered owners of the vessels, likely to obfuscate the extent of the businessman’s ownership over them.
The US sanctions have continued after the Israeli and American strikes on Iranian nuclear enrichment facilities in the 12-day war in June. Israel said its sweeping assault on the sites, Iran’s top military leaders, nuclear scientists, and ballistic missile program was necessary to prevent the Islamic Republic from realizing its avowed plan to destroy the Jewish state.
Iran has consistently denied seeking to acquire nuclear weapons. However, it enriched uranium to levels that have no peaceful application, obstructed international inspectors from checking its nuclear facilities, and expanded its ballistic missile capabilities. Israel said Iran had recently taken steps toward weaponization.
Iran retaliated to Israel’s strikes by launching over 500 ballistic missiles and around 1,100 drones at Israel. The attacks killed 31 people and wounded over 3,000 in Israel, according to health officials and hospitals.