Iraq Fuel Smuggling Network Generates Over $1 Billion

A clandestine fuel oil smuggling network in Iraq has reportedly generated over $1 billion annually for Iran and its allied militias since Prime Minister Mohammed Shia al-Sudani took office in 2022. This operation exploits Iraq's subsidized fuel allocations to asphalt plants, diverting approximately 500,000 to 750,000 metric tons of heavy fuel oil each month, primarily to Asia. Involved parties include various companies and individuals from Iraq, Iran, and Gulf states, who create false documentation and bribe officials to facilitate the smuggling. The profits are believed to bolster Iranian-backed militias, complicating Iraq's ability to control them, while also presenting potential risks of U.S. sanctions for Iraqi institutions. The extent of this illicit trade has not been thoroughly reported until now, drawing increased scrutiny on Iraq's balancing act between Washington and Tehran. Iranian officials have not commented on these findings, which suggest a significant economic and political intertwining between the two nations.