US sanctions Hezbollah finance network allegedly backed by Iran's IRGC

By some estimates, 80% of Iran’s economy is controlled directly and indirectly by the state or affiliated religious foundations operating under Ali Khamenei’s orders.

Ali Larijani, a senior adviser to Khamenei, told the Eco Iran website that “what Iran’s economy needs is security, and that does not mean control by security institutions,” a clear jab at the influence of the IRGC and other forces.

Criticizing the involvement of security organizations in the economy, Larijani, a former parliamentary speaker, said Iran’s economy should be controlled by the people rather than the government. He also called for administrative reforms, global engagement, and resolving Iran’s nuclear issue through dialogue.

Larijani emphasized that "the government controls some 85 percent of Iran's industries and mines," but argued that it lacks the efficiency to manage these sectors effectively.

He also stressed the need for the government to ensure security for the private sector by passing relevant laws and persuading the Supreme Leader to support the move.

Speaking on Iran's foreign policy and negotiations with the United States, Larijani stated, "If the Americans had acted wisely, they could have changed the course of Washington's relationship with Tehran." He argued that US sanctions have hindered Iran’s economic development, emphasizing that economic prosperity is unattainable under such restrictions.

Washington imposed oil export and international banking sanctions on Iran after President Donald Trump withdrew from the JCPOA nuclear deal in 2018. Iran’s already struggling economy, burdened by inefficiencies, immediately sank into a prolonged recession, while its currency depreciated 25-fold.

Regarding the future of nuclear negotiations, Larijani stated, "Everything depends on US behavior. There is a gap between what the United States declares and what it actually does." He also emphasized that Iran should pursue its national interests in both the East and the West.

Meanwhile, in an interview with a Tehran-based website, Iranian economist Ali Ghanbari, addressing the current financial crisis, noted that some Iranian politicians appear to overlook the fundamental principle that every country must prioritize its own national interests.

Ghanbari stated, "Realistically speaking, it is unlikely that the country's economic situation—regarding inflation, poverty, and unemployment—will improve significantly compared to last year, as Iran's economy remains constrained by structural issues in foreign policy that are beyond the government's control."

The economist added, "We cannot expect any improvement in the country's economic situation as long as sanctions pressure continues." He noted that this is in addition to the broader issue of insufficient domestic and foreign investment in Iran.

Ghanbari stressed that the defining characteristic of Iran's economic policy is "confusion," a problem that has become even more evident following the impeachment and dismissal of the former Minister of Economy.

As a way forward, Ghanbari suggested that Iran should abandon the idea of indirect talks and engage in direct negotiations with the United States, arguing that intermediaries only complicate the process.

He also urged the government to prioritize its employees to safeguard its social capital. At the same time, he emphasized that if Iran is serious about easing tensions and sanctions in the coming year, it must carefully select its strategic partners, a veiled reference to Tehran’s preference for close ties with China and Russia.

While both Larijani and Ghanbari emphasized the need to address foreign policy challenges to resolve Iran’s economic woes, analyst Hamid Aboutalebi suggested that a new path for dialogue with the United States may have emerged. Writing on the conservative Nameh News website in Tehran, he pointed to recent conciliatory remarks by Trump’s Middle East adviser, Steve Witkoff, as a potential opening.

Aboutalebi further argued that the Iranian government should move away from propaganda campaigns against Washington and pursue direct negotiations to de-escalate tensions.

Mohammad Hossein Adeli, the former head of the Central Bank of Iran under President Akbar Hashemi Rafsanjani, told the Khabar Online website that sanctions force Iranian traders to pay a premium of 10% to 20% above market prices for goods destined for Iran.

Economic hardships for Iranians have mounted as US-led sanctions and official mismanagement have sent costs of living soaring and the currency to historic lows.

The need to use covert routes to bypass sanctions necessitates multiple layers of documentation to conceal the final destination of goods, he added.

Establishing shell companies in third countries to aid in obscuring the destination further inflates the final price of imported goods.

Estimating the sanctions-evasion processes add almost a third to the original price of each product, Adeli referred to Iran's foreign trade volume of approximately $150 billion in the Iranian year 1402 (March 2023-March 2024).

"Thirty percent of this amount is $50 billion. This figure... is equivalent to the government's annual budget."

The figure totals 530 million rials per Iranian citizen annually, meaning a family of four effectively bears an additional monthly expense of 180 million rials (about $180) due to the sanctions' impact on non-oil trade.

While Iranian authorities estimate a family of three requires about $400 monthly for basic needs, the average worker earns approximately $120 per month.

Adeli's assessment focuses solely on the non-oil trade sector. Oil exports, which make up the bulk of government revenue, are also heavily sanctioned.

In a report late last year, Iran International estimated that sanctions-evasion tactics and the use of trustee companies cost Iran at least $13.5 billion in oil export revenue during the Iranian year 1403 (March 2024-March 2025).

In February, US President Donald Trump signed a directive to reinstate the so-called maximum pressure policy against Iran, aimed at bringing Iranian oil exports to zero. He emphasized that the Islamic Republic should no longer be able to sell oil to other countries.

The complaint, filed in the US District Court for the District of Columbia, outlines an alleged scheme between 2022 and 2024 to illicitly ship, store, and sell Iranian oil for the benefit of the Islamic Revolutionary Guard Corps (IRGC) and the IRGC-QF.

According to the Justice Department, facilitators used deceptive tactics to conceal the oil's Iranian origin, falsely labeling it as Malaysian.

The alleged scheme involved manipulating the tanker's Automatic Identification System (AIS) to conceal that the oil was loaded from an Iranian port.

Additionally, the facilitators are accused of presenting falsified documents to a storage and port facility in Croatia, claiming the oil was of Malaysian origin.

Storage fees in Croatia were reportedly paid in US dollars through US financial institutions, transactions that authorities believe would have been rejected had the institutions been aware of the oil's Iranian connection.

The petroleum product was ultimately sold in 2024, leading to the seizure of the $47 million in proceeds that are now subject to the forfeiture complaint.

The Justice Department further contends that the petroleum is the property of the National Iranian Oil Company (NIOC), which it accuses of perpetuating a federal crime of terrorism by providing material support to the IRGC and IRGC-QF.

The complaint alleges that profits generated from such sales support the IRGC's "full range of malign activities," including the proliferation of weapons of mass destruction and their delivery systems, support for terrorism, and human rights abuses both within Iran and internationally.

The Justice Department noted that funds successfully forfeited that are linked to a state sponsor of terrorism may be directed, in whole or in part, to the US Victims of State Sponsored Terrorism Fund.

The case is being investigated by the FBI's Minneapolis Field Office and Homeland Security Investigations in New York, with Assistant US Attorneys and a Trial Attorney from the National Security Division handling the litigation.

The Justice Department emphasized that a civil forfeiture complaint is merely an allegation, and the government bears the burden of proving forfeitability in the civil forfeiture proceeding.

In February, US President Donald Trump's signed a directive restoring the so-called maximum pressure policy on Iran of his first term aimed at driving the Islamic Republic's oil exports to zero.

Oil is critical for Iran's economy, accounting for around 15% of Iran's GDP and at least half of the government's budget, employing around a third of the country's 25 million workers.

Under the Biden administration, Iran's oil revenues surged due to weak sanctions enforcement. Trump has vowed to reverse it and bring the oil exports to zero, if Iran refuses to curtail its nuclear program.

The action is part of a sweeping update to the Entity List announced by the US Department of Commerce's Bureau of Industry and Security (BIS), targeting 80 companies and organizations across China, Iran, and several other countries.

“American technology should never be used against the American people," Under Secretary of Commerce for Industry and Security Jeffrey Kessler said in a statement.

The department said the changes aim to block sensitive US goods and technologies from reaching foreign militaries or intelligence services.

"BIS is sending a clear, resounding message that the Trump administration will work tirelessly to safeguard our national security by preventing US technologies and goods from being misused for high performance computing, hypersonic missiles, military aircraft training, and UAVs that threaten our national security.”

The Commerce Department did not name the Iranian entities publicly in its initial announcement but said two entities in Iran and China were “attempting to procure US-origin items for Iran’s defense industry and unmanned aerial vehicle programs.”

Also listed was Dart Aviation, a company previously sanctioned for re-exporting US goods to Iran, now updated with new aliases and addresses.

The Iranian government has consistently denied Western accusations about its drone exports to Russia and other parties. Officials in Tehran say the country’s military programs are purely defensive, though its UAVs have been displayed in multiple conflict zones including Ukraine, Iraq, and Syria.

“We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” Howard Lutnick, the US Secretary of Commerce said.

The US Treasury in February levied sanctions on six entities in Hong Kong and mainland China it said facilitate the acquisition of parts for armed drones produced by Iran, as part of Washington's "maximum pressure" campaign on Tehran.

The entities, the Treasury said, acquire parts for US-sanctioned Iranian firm, Pishtazan Kavosh Gostar Boshra, and its subsidiary company Narin Sepehr Mobin Isatis, which it said supplied Iran's drone and ballistic missile programs.

An analysis of discrepancies between tanker tracking data and China’s customs records shows Iran is using forged documents not only from Iraq, but also from the United Arab Emirates, Oman and especially Malaysia to export oil to China.

Hayyan Abdul-Ghani, Iraq’s oil minister, recently said that Iranian tankers use forged Iraqi documents to circumvent sanctions and the issue has been reported to the United States. Iran’s oil ministry dismissed these remarks as “negative and malicious propaganda.”

The Iraq case

Regarding Iraq specifically, data from Kpler, a commodity intelligence firm, and Iraqi domestic sources indicate that last year Iraq exported 1.19 million barrels per day (mbpd) of crude oil to China.

However, Chinese customs reported receiving 1.276 mbpd from Iraq.

In simpler terms, Iran disguised a total of 31 million barrels of its crude oil (equivalent to 86,000 bpd) as Iraqi oil and shipped it to China last year.

Statistics indicate that the practice has been underway since at least 2023. However, formal acknowledgment by Iraqi officials appears to have followed the tightening of Iran sanctions enforcement by the new US administration under President Donald Trump. Abdul-Ghani also noted that Baghdad has received reports of US naval forces seizing tankers in the Persian Gulf carrying Iraqi documents, but said Washington has been informed the documents are forged.

Iran’s LPG, mazut exports under the Iraqi brand

Since 2016, Iraq has been an LPG exporter. Kpler’s data shows that Iraq’s LPG exports surged last year, primarily due to the launch of a new oil refinery in Baghdad.

This development has further enabled Iran to sell its own LPG under Iraqi brand.

While China—importing a third of Iraq’s oil—does not purchase Iraqi LPG, but other Asian countries like Bangladesh do.

Several months ago, the head of Bangladesh’s Association of LPG Traders and Distributors sent a letter to the government and the central bank, warning about the entry of Iranian LPG shipments into the country with forged documents. The letter specifically mentioned a 10,000-ton LPG shipment carried by the vessel G YMM, which arrived in August under the branding of Iraq’s Basra Gas Company. However, in September of last year, the Basra Gas Company told Bangladesh’s Business Standard newspaper that this vessel had never loaded cargo from Iraq.

Additionally, Lloyd’s Listrecently estimated that over half of LPG cargoes claiming Iraqi origin may actually be Iranian.

Kpler data seen by Iran International reveals that Iran’s daily LPG exports soared to 330,000 bpd last year—2.5 times the 2020 level. Annual revenue from LPG exports (propane and butane) exceeds $10 billion, making it a significant component of Iran’s petroleum exports.

Previously, Reuters cited industry and trade sources in reporting a complex network in Iraq used for exporting Iranian fuel oil (mazut).

Kpler’s data shows that Iran loaded 230,000 bpd of mazut last year for export. This is a significant portion of its daily shipments of crude and other oil products.

There have been numerous reports about Iran’s use of forged documents to export oil and petroleum products under the names of the UAE, Oman, and particularly Malaysia.

The peculiar case of Malaysia

Kpler previously told Iran International that around 60% of Iran’s oil reaches China under the label of Malaysian crude.

Commenting on Iran’s rebranding tactics, the tanker-tracking firm TankerTrackers told Iran International: “Apart from Chinese data, there is no definitive way to determine the exact volume of rebranded Iranian oil. However, discrepancies in China’s import figures reveal the pattern—for example, when customs report 1.5 million barrels per day from Malaysia, but Malaysia’s actual exports are only a fraction of that.”

Samir Madani, an analyst at the firm, added: “If ship-to-ship transfers occur near Iranian waters and then head directly to China, the oil is most likely recorded as Iraqi or Omani crude. If the transfers take place in Riau, it’s reported as Malaysian.”

One striking discrepancy: Malaysia produces less than 570,000 barrels per day, yet Chinese customs data shows it imported 1.4 million barrels per day from Malaysia last year. Much of that volume is Iranian oil, along with some sanctioned Russian and Venezuelan crude.

Since US oil export sanctions were imposed on Iran in 2018 and 2019, Malaysia’s oil production has actually declined by 20%. Yet, its crude oil exports to China have increased eightfold over the same period.

Neither the Malaysian nor Chinese government has offered an explanation for how Malaysia’s exports to China are triple its total production capacity. The discrepancy, however, underscores the previous US administration’s broad leniency under President Joe Biden in enforcing sanctions against the Islamic Republic.