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Iraqi Shia Militia Smuggles Oil Into Iran

The Hashd al-Shaabi paramilitary organization in Iraq is smuggling crude from fields around Kirkuk to Iran, an Iraqi MP told Kurdistan 24, a local news outlet. The Shia organization is backed by the Iranian government.

According to the MP, Ashwaq Jaff, the Hashd al-Shaabi is using the money it gets for the oil to strengthen its positions in Iraq while the government in Baghdad remains oblivious. The militias are responsible for ensuring the security of Kirkuk and surrounding areas and are using this position to illegally pump oil from the local fields and sell it in Iran.

“These forces [Hashd al-Shaabi] are looking to enrich themselves financially by smuggling and exporting oil to get funds for the upcoming parliamentary elections in May,” Jaff said, adding that the revenues from the smuggling operation went straight into the pockets of the organization’s military commanders. According to her, the illegal oil exports are not a secret, with several of Jaff’s colleagues, one of which confirmed the information to Kurdistan24.

Shakhawan Abdullah, also a Kurdish MP like Jaff, said the Hashd al-Shaabi’s leadership had an agreement with the Iranian government to sell it Iraqi crude at lower than market prices. “After the Oct. 16 events, a group of mafias began exporting oil from Kirkuk and the areas they control to Iran without returning the revenue to the Iraqi government,” he said. Related: Are U.S. Oil Majors Primed For A Comeback?

However, the MPs said there was nothing the government in Baghdad can do about the situation, which is depriving it of part of the oil revenues from the Kirkuk oil, although there is no mention in the Kurdistan 24 report how much oil the militias are smuggling.

The Hashd al-Shaabi, which helped the Iraqi army regain control of Kirkuk and the fields around it from the Kurdish peshmerga, do not report to anyone and the Iraqi government has no way of forcing them to stop smuggling oil to Iran.

By Irina Slav for Oilprice.com

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