The U.S. Treasury Department on Thursday imposed sanctions on Iraq’s deputy oil minister, three senior leaders of Iran-aligned militias, and four Iraqi companies, accusing them of diverting Iraqi oil to benefit Iran’s government and its proxy forces.

The Office of Foreign Assets Control (OFAC) said in a statement that it had designated Ali Maarij Al-Bahadly, Iraq’s deputy minister of oil, for facilitating the diversion of Iraqi oil products that were sold for the benefit of Tehran and Iran-backed militias. OFAC also blacklisted three senior figures from the Iran-aligned militias Kata’ib Sayyid Al-Shuhada and Asa’ib Ahl Al-Haq, along with four Iraqi oil-sector companies controlled by one of them.

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

According to Treasury, Al-Bahadly has held multiple posts in Iraq’s oil ministry since 2018, including head of the licensing and contracts office, deputy minister, and acting minister. The department said he used his official roles, as well as an earlier post leading the Iraqi parliament’s oil and gas committee, to enrich Salim Ahmed Said, a previously sanctioned Iran-affiliated oil smuggler, and the militia Asa’ib Ahl Al-Haq.

OFAC said Al-Bahadly granted exportation rights to Said’s companies and authorized the trucking of “several million dollars’ worth of oil per day” from the Qayarah oil field to the previously designated VS Oil Terminal FZE in Khor Zubayr, where Iranian crude was mixed with Iraqi oil before being shipped to market. He also falsified documentation on the origin of the oil, allowing it to be sold abroad disguised as purely Iraqi product, OFAC said. 

OFAC also designated Mustafa Hashim Lazim Al-Behadili, also known as Sayyid Awn, whom it described as a leader and economic official of Asa’ib Ahl Al-Haq. Treasury said he developed an oil trucking and security unit that allowed the militia to become a dominant force in Iraq’s metals industry and to expand into fuel oil theft after the U.S. withdrawal from Iraq in 2011.

Working with U.S.-designated AAH senior leader Laith Al-Khazali, Al-Behadili oversaw oil-smuggling financing and mineral-industry activities for the militia, used businesses and government contracts as a front for its financial operations, and dealt directly with Iran’s Islamic Revolutionary Guard Corps-Qods Force on shipping arrangements, OFAC said. 

Gulf Energy Oil Services Limited, Gulf General Contracting Limited, Iraq International Energy for the Import and Sale for Petroleum Products Limited, and Gulf Energy for General Transport and Marine Services and Real Estate Consultancy LLC were also designated, the department said.

The department said the designations were part of a broader campaign it calls Economic Fury, which it said had disrupted billions of dollars in projected Iranian oil revenue, frozen nearly half a billion dollars in regime-linked cryptocurrency, and cracked down on Tehran’s shadow banking networks.