US Treasury Sanctions Iraq's Deputy Oil Minister and PMF Leaders for Iran Oil Diversion Scheme

The US Treasury Department designated Iraq's Deputy Oil Minister Ali Maarij al-Bahadly and senior leaders of the Iran-aligned Kata'ib Sayyid al-Shuhada and Asa'ib Ahl al-Haq militias on May 7, 2026 for allegedly facilitating the diversion of Iraqi crude oil — worth several million dollars per day — by mixing it with Iranian oil for export in violation of US sanctions against Iran. All US-jurisdiction assets were frozen. The sanctions were part of a broader US pressure campaign that had targeted 7 PMF commanders from Kata'ib Hizballah, Harakat al-Nujaba, and Asa'ib Ahl al-Haq in an April 17 action. Iraq's government formally denied the allegations. The designations added complexity to PM-designate Zaidi's government formation as he attempted to balance maintaining US confidence while managing Iran-aligned coalition partners who depend on the PMF network.