US Treasury Sanctions International Network for Smuggling Iranian LPG

WASHINGTON — The U.S. Department of the Treasury announced on Friday, June 5, 2026, a new round of sanctions targeting a complex international network of individuals, companies, and vessels accused of smuggling hundreds of millions of dollars' worth of Iranian liquefied petroleum gas (LPG) to buyers in South and East Asia.

The action, taken by the Treasury’s Office of Foreign Assets Control (OFAC), is the latest move in Washington's intensifying “Economic Fury” pressure campaign designed to disrupt Tehran’s revenue streams from energy exports. According to the Treasury Department, the network systematically disguised Iranian-origin LPG as if it were from Oman, a Gulf state not subject to the same U.S. sanctions, to deceive buyers and evade international restrictions.

In a statement, Treasury Secretary Scott Bessent said the department would continue its aggressive enforcement actions. “Iran’s economy is floundering and its military is decimated,” Bessent stated. “Through Economic Fury, Treasury will continue to sever Iran’s shadow fleet, shadow banking networks, and access to global trade.”

The sanctions detail a sophisticated operation that utilized a web of front companies in the United Arab Emirates and China, foreign bank accounts, and a so-called “shadow fleet” of tankers to transport the gas while concealing its connection to Iran. The designations effectively block the targeted entities and individuals from accessing the U.S. financial system and freeze any assets they hold under U.S. jurisdiction.

At the heart of the scheme, according to OFAC, were Afghan national Sarbaz Abdul Zada and Turkish national Mohammad Shakol Mihandoust, also known as Haji Shakoor. The Treasury alleges they operated several UAE-based front companies, including Butani Trading LLC, Dundlod Trading FZE, and ADH Energy FZE, to facilitate the illicit shipments. One China-based firm, Shanghai Qianye Energy Co., Ltd., which Treasury said was controlled by Mihandoust, was also sanctioned.

The department provided specific examples of the network's activities. It cited ADH Energy FZE for its role in selling millions of barrels of Iranian LPG to Bangladesh in March 2026. Another instance involved the vessel LPG SEVAN, which allegedly transported 750,000 barrels of Iranian-origin LPG to Bangladesh between August and November 2025.

In total, the sanctions targeted 12 entities, including firms based in the Marshall Islands and the UAE, as well as six LPG tankers. The vessels named were MD 23, GLENDALE, AMIR GAS, GAS LAGOON, MILE, and GAZ GMS. This action underscores a broader U.S. strategy of increased maritime enforcement, which has recently included boardings of sanctioned tankers operating in the Indian Ocean.

In a parallel move, OFAC also designated Mehrdad Geramian Nik and Partners Company, an Iranian exchange house, along with its leadership. The Treasury accused the firm of being a key part of Iran's shadow banking system, moving hundreds of millions of dollars in foreign currency on behalf of already-sanctioned Iranian banks. This highlights the financial component of the evasion architecture, which relies on a chain of intermediaries to launder proceeds and obscure the ultimate beneficiaries.

For U.S. businesses, particularly small and mid-sized companies with international supply chains, these enforcement actions serve as a stark reminder of the pervasive risks of sanctions violations. The use of front companies and falsified documentation means that illicit actors can be deeply embedded in seemingly legitimate commercial transactions. A U.S. importer or logistics firm could inadvertently engage with a sanctioned entity—be it a shipping company, a trading partner, or a financial intermediary—and face severe penalties, including fines and being cut off from the financial system.

The complexity of these evasion networks makes standard due diligence challenging. The designated tankers, for example, may have operated under different flags and ownership structures, making it difficult for a charterer or cargo owner to identify their link to sanctioned activity without specialized compliance tools and expertise.

These Treasury actions demonstrate a clear commitment to disrupting not just the primary actors but the entire ecosystem that enables sanctions evasion. For American companies, the message is that ignorance of a counterparty's illicit connections is not a viable defense. The burden of proof falls on businesses to know who they are dealing with at every step of their supply and financial chains. This requires a level of scrutiny that goes far beyond surface-level checks, demanding a deeper understanding of vessel histories, corporate ownership structures, and transactional patterns.

In our experience, many small and mid-sized businesses underestimate their exposure to sanctions risk, assuming it’s a problem only for large multinational corporations in the energy sector. The reality is that these sophisticated evasion networks are designed to blend into legitimate global trade, meaning any company involved in international shipping or finance could be at risk. A seemingly routine transaction with a supplier in Asia could unknowingly involve a vessel from Iran's shadow fleet or a payment processed through a sanctioned exchange house. The consequences of such an oversight, even if unintentional, can be catastrophic, leading to frozen assets, crippling fines, and irreparable reputational damage. This is precisely why robust financial risk management is not a luxury but a necessity. At C&S Finance Group LLC, we help clients build and implement compliance frameworks to navigate these hidden dangers. Businesses concerned about their international exposure can learn more at csfinancegroup.com.

Looking ahead, observers expect the Treasury Department to continue its aggressive enforcement under the “Economic Fury” banner. The focus on both the physical transport of goods via the shadow fleet and the financial trails through shadow banking indicates a comprehensive strategy. Businesses involved in global trade should anticipate heightened scrutiny and be prepared to demonstrate rigorous compliance and due diligence procedures to regulators.