By Fariba Raad | 2025-04-09

The United States has initiated a process to seize $47 million in proceeds from an Iranian oil smuggling operation that funded the Islamic Revolutionary Guard Corps (IRGC) and its Quds Force.

In a civil forfeiture complaint filed March 26 in a US court, the United States moved to seize proceeds from the operation, which used falsified documents and multiple vessel transfers to store around one million barrels of crude in Croatia.

An initial vessel, "Berg 1," departed from Iran's Kharg Island in January 2022 with its cargo of sanctioned oil, which was transferred to different vessels three times using ship-to-ship transfers, according to the complaint.

"Okeanos" ultimately discharged the oil at Croatia's Janaf storage facility in Omišalj in April 2022, with the facilitators presenting falsified documents "claiming that the oil was Malaysian," the US Justice Department said.

The cargo was stored by a Swiss entity acting on behalf of US-sanctioned trader Triliance Petrochemical, which has "has exclusively done business on behalf of Triliance, selling oil products produced in Iran" since 2022, the complaint said.

In June 2024, the unnamed Swiss entity sold the cargo to an international company, which then resold it.

The scheme was reportedly orchestrated by Triliance manager Ali Bayandorian.

US authorities later seized the proceeds from the sale, saying they represent terrorism funding linked to the IRGC, which arms and fund proxies including Hizbullah and the Houthis.

Funding terror by sea

The National Iranian Oil Company, a state entity providing material support to the IRGC and IRGC Quds Force, has been a key target of US sanctions.

"The regime has assigned 650,000 barrels of oil per day directly to the IRGC for rebranding in international markets," said Iranian energy expert Dalgha Khatinoglu, who is based in Azerbaijan.

This oil is "mainly exported to China and smaller Chinese refineries," he told Pishtaz.

When smuggling oil proves insufficient to meet the IRGC's financial needs, the regime seizes foreign oil tankers under various pretexts and reportedly resells their oil on the open markets, according to regional analysts.

As evidenced by the Iranian Navy's January 2024 capture of "St. Nikolas" and detention of its 19-member crew, vessel seizures also have been used for the purposes of "hostage diplomacy."

The crews' release is often contingent on political concessions, analysts say.

"Iran's attempts to seize ships have weaponized and militarized a waterway crucial to international trade and free navigation," said Kent University international relations professor Yariv Voller.

The IRGC's naval forces employ fast boats and drones to harass commercial vessels, both for cargo theft and to demonstrate control over vital shipping lanes amid sanctions, according to the analysts.