Subsidised fuel oil diverted via asphalt plants and smuggled through Basra (from 2022 to 2024)
Reuters reported in December 2024 that a fuel-oil smuggling network, which some experts believe generates at least $1bn a year for Iran and its proxies, flourished after late 2022: subsidised heavy fuel oil allocated to private (often nominal) oxidised-asphalt plants was trucked to Basra/Khor al-Zubair and exported, partly mixed with Iranian product. The Washington Institute estimated the scheme at more than $80m a month. In July 2024 the Council of Ministers cut allocations to 60% of approved capacity and the Oil Products Distribution Company halted movement of asphalt-plant output towards Basra. In May 2026 OFAC designated an Asa'ib Ahl al-Haq economic official for fuel-oil theft.
- Period
- From November 2022 to July 2024
- Sector
- Oil and gasSubsidised heavy fuel oil allocations
- Kind of case
- Media investigation
- Jurisdiction
- Federal Iraq
How the money moved, according to the sources
Subsidy arbitrage: state sells fuel oil cheaply to industrial users; allocations are inflated or to fake plants, then the product is resold or exported at market prices with protection from armed groups.
What happened
Administrative restrictions (July 2024); no named prosecutions in government documents.
Open questions
- Names or owners of asphalt plants receiving allocations; Integrity Commission cases.
People and companies
This case does not name any person or company. It rests on figures and institutions.
Sources
- The Washington Institute for Near East Policy7 August 2024Report by a non-governmental organisation or research centreTier C
Extent of Terrorist and Militia Fuel Oil Diversion Exposed in Iraq
OriginalA similar scam that ended in 2019 netted around $250 million per year
- Reuters (Maha El Dahan, Yousef Saba)3 December 2024Press reportTier D
Fuel oil smuggling network rakes in $1 billion for Iran and its proxies
OriginalA sophisticated fuel oil smuggling network that some experts believe generates at least $1 billion a year for Iran and its proxies has flourished in Iraq