OFAC designates al-Samarra'i/Babylon network — Iranian oil smuggled disguised as Iraqi-origin crude
Sanction↓ Restrictive~🇺🇸 US · OFAC✎ 2026-07-21
announced 2 Sept 2025
effective 2 Sept 2025
Status
effective 2 Sept 2025 · stage not filed
Sourcing
🟢 primary-OJ 2 primary
🇺🇸 US issued this sanction measure targeting 5 jurisdictions, touching oil-gas, maritime-shipping. It reads as restrictive.
RBI 2quant 3 · $34.6B📌 stable
On 2 September 2025, the US Treasury's Office of Foreign Assets Control (OFAC) designated Waleed Khaled Hameed al-Samarra'i, a dual Iraqi/St Kitts-and-Nevis citizen, along with his UAE-based shipping manager Babylon and five Marshall Islands-registered shell companies (Tryfo Navigation, Keely Shiptrade, Odiar Management, Panarea Marine, Topsail Shipholding) that hold registered ownership of nine Liberia-flagged tankers (ADENA, LILIANA, CAMILLA, DELFINA, BIANCA, ROBERTA, ALEXANDRA, BELLAGIO, PAOLA). The network blends Iranian crude with Iraqi oil via ship-to-ship transfers in the Arabian Gulf and at Iraqi ports, then markets the blend as solely Iraqi-origin to evade US sanctions, generating hundreds of millions of dollars for the Iranian regime and al-Samarra'i. The action was taken pursuant to Executive Order 13902 and blocks all US property and interests of the designated individual, entities and vessels.
Analyst notesShowHide
Mechanism
Waleed Khaled Hameed al-Samarra'i operates an oil-blending scheme that disguises Iranian-origin crude as Iraqi crude to route around US sanctions on Iran's petroleum sector under E.O. 13902. UAE-based Babylon manages a fleet of nine Liberia-flagged tankers that conduct ship-to-ship transfers in the Arabian Gulf and blend Iranian oil into cargoes at Iraqi ports; registered ownership of the vessels sits with five Marshall Islands-incorporated shell companies, a layering structure typical of Iran shadow-fleet sanctions evasion. OFAC's designation blocks all US property and interests of al-Samarra'i, Babylon, the five MI shell owners and the nine named vessels, and exposes any non-US counterparty dealing with them to secondary-sanctions risk.
Severity is set at 3 (quant basis) on the disclosed "hundreds of millions of dollars" revenue figure and nine-vessel fleet size — smaller in scope than the ~50-designee, 33-vessel wave of 2025-10-09 (2025-10-09-us-ofac-iran-energy-export-network-vessels-entities), but a continuation of the same E.O. 13902 sectoral-determination enforcement architecture.
Downstream implications
- Reinforces the pattern of Marshall Islands/Liberia shell-and-flag
structures used to obscure beneficial ownership of Iran-linked tankers — relevant for downstream KYC/correspondent-banking screening.
- Iraq-blending as a laundering technique (vs. direct Iran-origin
shipment) is a distinct evasion vector from the China-refinery "teapot" destination-side laundering captured in later 2025 waves.
Open questions
- Whether any of the nine designated vessels reappear re-flagged or
renamed in subsequent OFAC waves, consistent with the evasion pattern seen elsewhere in the shadow-fleet designation series.