On July 30, 2025, the United States Treasury Department imposed sweeping sanctions on a vast network of over 50 vessels and more than 50 individuals and entities involved in illicit oil transport operations from Iran and Russia. The sanctions target a shadow fleet orchestrated by Mohammad Hossein Shamkhani, the son of former Iranian defense minister and current advisor to Supreme Leader Ayatollah Ali Khamenei. The U.S. accused Shamkhani of leveraging his father’s political clout to finance and operate a covert maritime empire that generates billions in revenue for Iran’s theocratic regime and its allies.
The U.S. Office of Foreign Assets Control (OFAC), in coordination with the Financial Crimes Enforcement Network (FinCEN), described the move as part of a larger strategy to sever financial lifelines fueling malign activities by Iran and Russia. According to the official announcement, the sanctioned entities are deeply involved in laundering profits from global oil sales, often routed through opaque channels and front companies.
Vast oil fleet used to mask links to Iran, Russia and Shamkhani family
The targeted fleet includes both oil tankers and container ships operated under frequently changing management structures to conceal ultimate ownership. A substantial portion of these vessels was until recently managed by Armada Global Shipping DMCC, a Dubai-based firm that oversaw dozens of ships now linked to the Shamkhani network. Other companies involved in operating this fleet include Marvise SMC DMCC, Koban Shipping LLC, Crios Shipping LLC and Fractal Marine DMCC.
These corporate shells, often masquerading as legitimate financial service providers, form a key part of the mechanism used to obscure ties to Iran and funnel oil revenues back into the regime’s coffers. The network primarily ships crude and refined oil to buyers in Asia—particularly China—allowing Tehran and Moscow to sidestep Western sanctions and bankroll military and political operations across multiple regions.
Shamkhani network previously tied to drone and missile shipments to Russia
In 2024, Mohammad Hossein Shamkhani’s network was publicly exposed for facilitating shipments of cruise missiles, drone components and dual-use goods from Iran to Russia. These arms transfers were reportedly made in exchange for deliveries of Russian oil, deepening the military and economic partnership between the two sanctioned regimes. The current U.S. sanctions are seen as a direct response to this collaboration, which Washington views as a threat to regional and global security.
Shadow fleet poses growing threat to global security and the environment
U.S. Treasury officials emphasized that the so-called “shadow fleet” represents more than just a sophisticated scheme to evade sanctions. It is a geopolitical instrument with broad environmental and economic risks. The fleet—comprising hundreds of aging, poorly maintained tankers often flagged in offshore jurisdictions like Panama, Liberia, and the Marshall Islands—is responsible for transporting sanctioned oil while deliberately obscuring its origin. These vessels frequently operate without proper insurance, inspections, or oversight, increasing the likelihood of accidents, oil spills, and maritime disasters.
The U.S. warns that revenues from this illicit trade remain a vital source of income for the Kremlin, enabling it to sustain its ongoing aggression against Ukraine. Treasury Secretary Scott Bessent described the more than 115 new designations as “the most expansive sanctions to date since the launch of the maximum pressure campaign on Iran,” underlining the Biden administration’s renewed push to choke off funding for hostile regimes.
Elite beneficiaries shield wealth while ordinary Iranians suffer
The Shamkhani family reportedly uses its illicit gains to enjoy global privileges denied to ordinary Iranians—including exclusive real estate holdings and foreign passports obtained in exchange for major investments. These passports allow them to travel discreetly and conduct business abroad while concealing their ties to Iran’s clerical elite. This highlights the widening gap between Iran’s ruling class and its population, which continues to face crushing economic hardship under international sanctions and domestic repression.
By targeting this entrenched financial network, the U.S. aims to disrupt the flow of resources fueling Iran’s strategic ambitions and Russia’s war economy—while also exposing the broader infrastructure that sustains one of the world’s most dangerous covert shipping operations.
