Iran, Iraqi militias net over $1 billion in fuel oil smuggling

Iran and allied Iraqi militias have earned at least a billion dollars in a scheme to launder fuel oil from the Islamic Republic as originating from its Arab neighbor, Reuters reported, providing a key economic lifeline amid US-led sanctions.

The profits come from sales abroad to mostly Asian markets as well as diversion to Iraqi asphalt plants at government-subsidized prices, the news agency reported citing sources and Western intelligence reports.

They estimated that the proceeds from the illicit trade ranged from $1 billion to over $3 billion annually.

Energy-rich Iran faces obstacles to getting its crude oil and fuel to the global market and has for years used complex routes and shadow fleets to disguise its flows and skirt mostly Western sanctions.

Iraq's leadership is composed mostly of Iran's co-religionists from the preponderant Shia community, and the ascendant political parties are supported by Iraqi armed groups funded and armed by Tehran.

One of those militias, Asaib Ahl al-Haq, is a key backer of Iraqi Prime Minister Mohammed Shia al-Sudani and according to the Reuters report is central to the smuggling operation.

Some of the asphalt plants the report said were involved are under the control of the group and another militia Kataib Hezbollah, which is more directly backed by Iran's Islamic Revolutionary Guard Corps.