US SANCTIONS IRAQI DEPUTY OIL MINISTER FOR ALLEGEDLY DIVERTING FUNDS TO IRANIAN PROXIES
RBIL, Kurdistan Region of Iraq – The US on Thursday announced new sanctions targeting Iraqi individuals and businesses allegedly exploiting the country’s oil sector to support Iran and its proxies, including the country’s deputy oil minister Ali Maarij al-Bahadly.
The sanctions target Bahadly for being “instrumental in facilitating the diversion of Iraqi oil products” to benefit Iran-affiliated oil smuggler Salim Ahmed Said and the Iran-aligned militia Asa’ib Ahl al-Haq (AAH), the Treasury Department’s Office of Foreign Assets Control (OFAC) said in a statement.
AAH is a pro-Iran armed group that is part of the state-integrated Popular Mobilization Forces (PMF) and is designated as a terrorist organization by the US, having been responsible for numerous attacks on US diplomatic and military facilities.
“For years, Maarij has used his official positions—first as the head of the Iraqi parliament’s oil and gas committee, and then within the Iraq Ministry of Oil—to enrich Said, AAH, and by extension, Iran,” the OFAC added.
The deputy briefly served as acting oil minister in 2024 when his superior, Hayyan Abdul-Ghani, required a medical procedure in the US. Bahadly at the time said that “all the administrative and financial powers granted to the minister” were bestowed upon him during the latter’s absence.
“Like a rogue gang, the Iranian regime is pillaging resources that rightfully belong to the Iraqi people,” said Secretary of the Treasury Scott Bessent. “Treasury will not stand idly by as Iran’s military exploits Iraqi oil to fund terrorism against the United States and our partners.”
The sanctions, which come as part a large-scale US campaign dubbed Operation Economic Fury seeking to disrupt Iranian revenue sources, also target an economic official for AAH, Mustafa Hashim Lazim al-Behadili, who also owns a number of companies in the country’s oil sector.
“Following the US withdrawal from Iraq in 2011, al-Behadili played an important role in developing an oil trucking and security unit, allowing AAH to become a dominant actor in the Iraqi metals industry, as well as enabling AAH’s entrance into fuel oil theft, which focused on stolen or subsidized oil,” the OFAC said.
Last month, the US Treasury Department announced sanctions targeting seven pro-Iran Iraqi militia commanders “responsible for planning, directing, and executing attacks” against US personnel and interests in the country during the war with Iran, including Kataib Hezbollah, Kataib Sayyid al-Shuhada (KSS), Harakat al-Nujaba, and AAH.
A senior KSS official, Ahmed Khudair Maksus Maksus, is also targeted in the latest sanction package for allegedly arranging “the payment of millions of dollars to Hizbollah to facilitate the purchase of weapons, and coordinated logistics related to the transfer and delivery of the weapons with Hizbollah associates.”
Many of the militias mentioned are part of the Islamic Resistance in Iraq, a network of Iran-aligned Iraqi Shiite militias linked to Iran’s Revolutionary Guard Corps (IRGC).
The groups are also officially under the auspices of the Iraqi state via the PMF, which was formed by Shiite paramilitary groups in 2014 following a call from Grand Ayatollah Ali al-Sistani to mobilize against the Islamic State (ISIS). In 2016, the PMF was granted official status by the Iraqi government.
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Iraq’s Unified Treasury reforms, massive oil discoveries, banking modernization, and geopolitical shifts are fueling new speculation about the Iraqi dinar reinstatement in 2026. Full analysis inside.
Featured Snippet
Iraq is accelerating banking reforms through its Unified Treasury system while expanding oil reserves and reducing Iranian dependency. These developments are increasing speculation that Iraq may be positioning itself for greater international financial integration and a future Iraqi dinar reinstatement.
IRAQ’S UNIFIED TREASURY, MASSIVE OIL DISCOVERIES & THE REAL STORY BEHIND THE DINAR DELAYS
Iraq Quietly Continues Major Financial Reforms
While political headlines continue dominating the news cycle in Iraq, something far more important may be unfolding behind the scenes: the rapid modernization of Iraq’s banking and treasury system.
One of the biggest developments now gaining attention is Iraq’s implementation of the Unified Treasury system— a major financial reform designed to centralize and modernize government fund management across the country.
This reform may sound technical at first glance, but its long-term implications for Iraq’s economy, international banking integration, and future currency stability could be enormous.
And many observers believe this is not happening by accident.
What Is Iraq’s Unified Treasury System?
The Unified Treasury concept refers to a centralized financial management framework where government revenues, expenditures, and public accounts are consolidated under a more transparent and controlled system.
In practical terms, this means:
Better monitoring of government spending
Reduction of corruption and “ghost accounts”
Stronger oversight of state revenues
Improved liquidity management
Enhanced digital payment systems
Greater compliance with international banking standards
Recent reports indicate that Iraq’s Ministry of Finance has already recovered trillions of dinars while shutting down thousands of unnecessary or inactive bank accounts.
That alone tells you the scale of inefficiency and financial leakage Iraq has been trying to eliminate.
More importantly, these reforms align directly with recommendations made by international auditing institutions and financial advisory groups assisting Iraq’s banking transformation.
This is exactly the kind of infrastructure modernization expected from a nation preparing for deeper integration into the global financial system.
Iraq Is Preparing for International Banking
For years, critics claimed Iraq lacked the financial infrastructure needed for a stronger currency environment.
That argument becomes increasingly difficult to maintain as Iraq continues implementing:
Electronic payment expansion
Banking digitization
Treasury centralization
Anti-money laundering reforms
SWIFT integration improvements
Cross-border payment modernization
These are not cosmetic upgrades.
These are foundational systems required for modern international finance.
The reality is simple:
Countries do not modernize their treasury and banking architecture at this scale unless they are preparing for larger economic objectives.
Iraq’s Oil Wealth Continues Exploding
At the same time Iraq modernizes its banking sector, another major development continues accelerating:
Massive oil discoveries.
Recent reports revealed a new oil discovery near the Saudi border estimated at nearly 9 billion barrels.
That is not a small regional reserve.
That is world-class energy wealth.
Iraq’s Oil Ministry has also continued pushing toward an ambitious production goal of:
6 Million Barrels Per Day by 2029
This strategy aligns with Iraq’s long-term energy expansion roadmap and its efforts to increase state revenues dramatically over the coming years.
And here’s the key point many people overlook:
Diversification does NOT mean abandoning oil.
This narrative has often been misunderstood.
No country intentionally weakens its national currency simply because one industry generates large revenues.
The United States never devalued the dollar because of the automotive industry.
Saudi Arabia never weakened the riyal because of oil exports.
So why has Iraq’s currency remained artificially constrained for so long despite possessing some of the largest oil reserves on Earth?
That question leads directly into the geopolitical side of the story.
The Real Issue May Not Be Iraq’s Economy
Many analysts now believe Iraq’s currency limitations are tied less to economics and more to regional security concerns.
Specifically:
Iranian influence in Iraq
Proxy militias
Terror financing concerns
OFAC restrictions
International compliance risks
From this perspective, holding back full dinar normalization may have been viewed internationally as a protective measure until Iraq demonstrated greater financial independence and security stability.
And Iraq has slowly been moving in that direction.
Iraq Is Reducing Dependence on Iran
Over recent years, Iraq has steadily reduced several major dependencies on Iran, including:
Electricity imports
Natural gas dependence
Financial transfer exposure
Dollar leakage vulnerabilities
This shift has not happened overnight.
It has been a gradual strategic process heavily encouraged by the United States and international financial institutions.
At the same time, Iraq continues strengthening ties with:
China
Gulf nations
International investors
Western banking institutions
This broader balancing strategy could become critical for Iraq’s long-term economic sovereignty.
The Shadow of 2012–2013 Still Looms
Many long-time dinar observers remember the period around 2012–2013 when former Central Bank Governor Dr. Shabibi reportedly pushed forward major currency reform initiatives.
At that time, Iraq had already secured significant international approvals and IMF coordination.
But political instability and Iranian-backed influence inside Iraq reportedly disrupted that momentum.
This historical context remains important today because it highlights a recurring pattern:
Economic reforms in Iraq often advance rapidly… until geopolitical pressures intervene.
That tension still exists today.
Could 2026 Become Iraq’s Financial Turning Point?
There is growing speculation that Iraq’s convergence of:
Banking reforms
Treasury modernization
Oil expansion
Reduced Iranian dependency
Electronic payment growth
International investment projects
could eventually create the conditions necessary for a major monetary transition.
No one can predict exact timelines.
But the direction of reform is becoming increasingly difficult to ignore.
The key takeaway is this:
Iraq today looks very different from Iraq 10 years ago.
The country now possesses:
Stronger banking controls
Expanding energy wealth
More sophisticated payment systems
Increasing regional influence
Larger infrastructure ambitions
And all of these developments point toward a nation attempting to reposition itself economically on the world stage.
Why This Story Matters Globally
The Iraqi dinar conversation is no longer just about speculative currency chatter.
It increasingly intersects with:
Global energy markets
Middle East stability
International banking reforms
De-dollarization trends
Strategic infrastructure investment
As Iraq modernizes, global investors and financial observers continue watching closely.
Because if Iraq successfully stabilizes politically while unlocking its full economic potential, the long-term implications could be enormous.
Quick Q&A Section
What is Iraq’s Unified Treasury system?
Iraq’s Unified Treasury system is a centralized financial management framework designed to improve transparency, monitor public funds, reduce corruption, and modernize government banking operations.
Why is Iraq reforming its banking sector?
Iraq is upgrading its banking infrastructure to support international financial integration, electronic payments, anti-money laundering compliance, and long-term economic modernization.
Did Iraq discover new oil reserves?
Yes. Recent reports indicate Iraq announced a major oil discovery near the Saudi border estimated at approximately 9 billion barrels.
Why do some believe the Iraqi dinar has been delayed?
Some analysts believe geopolitical concerns, terrorism financing risks, Iranian influence, and international sanctions contributed to delays in broader Iraqi currency normalization.
Could Iraq’s economy grow significantly by 2026?
Many observers believe Iraq’s banking reforms, infrastructure projects, oil expansion, and financial modernization could position the country for major economic growth over the next several years.
Final Thoughts
Iraq’s transformation is no longer theoretical.
The reforms are visible.
The oil expansion is measurable.
The banking modernization is accelerating.
And the geopolitical battle surrounding Iraq’s future is becoming increasingly clear.
Whether these developments ultimately lead to a major currency event remains uncertain.
But one thing is undeniable:
Iraq is actively rebuilding the financial architecture of a nation preparing for a very different future.
