The US has warned Iraq it could face sanctions over what it called Iranian oil smuggling and ties to armed groups, threatening to freeze millions in revenue and target state oil firm SOMO, Iraqi media reported.
“The United States has warned the Iraqi government that ongoing oil smuggling operations involving Iranian crude could trigger severe sanctions, potentially targeting Iraq's State Organization for Marketing of Oil (SOMO) and freezing $350 million in oil revenue unless implicated individuals are held accountable,” Erbil-based Kurdistan24 wrote Saturday.
On July 3, the State Department issued a direct warning to Baghdad, citing what it called the smuggling of Iranian crude through Iraqi networks and naming six sanctioned entities and four tankers involved in the trade.
The Treasury later designated 22 companies across Turkey, the UAE, and Hong Kong for facilitating sales that fund Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).
“We have contacted the federal Minister of Oil to come to parliament so we can question him about this matter, as this smuggling jeopardizes Iraq’s exports,” said committee member Sabah Subhi in remarks to Kurdistan24.
“Ninety-five percent of Iraq’s revenue depends on oil exports,” he added, reflecting the dilemma as Iraq is once again stuck between allegiances with Washington and its neighbor, Tehran.
US pressure builds over armed groups tied to Iran
The US warning comes alongside growing concern over Iranian-backed armed groups operating within Iraq’s Popular Mobilization Forces (PMF).
A US State Department spokesperson told Iraq’s Shafaq News on Saturday, “These groups continue to engage in violent and destabilizing activities in Iraq.
“We remain concerned about Iranian-backed militia groups, which operate within the Popular Mobilization Forces, including individuals and groups affiliated with designated foreign terrorist organizations.”
On Sunday, Prime Minister Mohammed Shia al-Sudani met with US Chargé d’Affaires Steven Fagin in Baghdad amid US calls for Iraq to take direct steps to rein in sanctioned militias and safeguard regional stability.
US officials have consistently flagged groups within or aligned with the Popular Mobilization Forces—including Kataib Hezbollah and Asaib Ahl al-Haq—for their ties to Iran’s Revolutionary Guard-Quds Force and involvement in attacks on US personnel in Iraq.
