The U.S. Treasury slapped sanctions on Iraq's Deputy Oil Minister Ali Maarij Al-Bahadly and three Iran-backed militia leaders Wednesday under Operation Economic Fury, accusing them of running a scheme that mixed Iranian crude with Iraqi oil at the VS Oil Terminal and faked provenance documents to hide the origin. Separately, the Department of Justice and Commodity Futures Trading Commission are investigating $2.6 billion in oil trades placed minutes to hours before de-escalation announcements during the 2026 Iran conflict — a pattern that echoes earlier Polymarket cases.
How the smuggling worked
At the center of the sanctions is the VS Oil Terminal, where the network allegedly blended Iranian crude into legitimate Iraqi shipments. Forged documents — certificates of origin, bills of lading — made the oil appear clean. Al-Bahadly, as deputy oil minister, would have had authority over export procedures. The Treasury didn't specify how much oil moved through the scheme, but the sanctions freeze any U.S.-based assets and bar American companies from dealing with the named individuals.
Timing of the trades
The DOJ and CFTC are zeroing in on four clusters of suspicious trades: $500 million placed 15 minutes before a March 23 announcement that airstrikes would be delayed; $960 million before an April 7 ceasefire news; $760 million ahead of an April 17 statement on the Strait of Hormuz; and $430 million just before an April 21 truce extension. In each case, the trades were placed so close to the public release that investigators suspect inside knowledge. The total — $2.6 billion — is large enough to move benchmark prices, though authorities haven't named any firms or individuals involved in the trading.
The crypto connection
Operation Economic Fury isn't new to crypto. Earlier this year, the same task force froze $344 million in Tether (USDT) and seized $500 million in regime-linked digital assets. The latest oil-trade investigation mirrors a pattern seen on Polymarket, where wallets repeatedly profited on Iran outcomes before public announcements. That parallel suggests investigators are looking for similar signals — wallets that funded ahead of key news and cashed out immediately after.
What comes next
The sanctions are immediate, but the trading probe is still in its early stages. No charges have been filed. The DOJ and CFTC are likely reviewing brokerage records, blockchain data, and communication logs to trace who placed those $2.6 billion in orders. The Treasury has not said whether it plans additional sanctions on the trading side. Given the size of the trades and the timing, this investigation probably isn't ending soon.
