How a Shadow Oil Empire Helps Iran’s Regime Cling to Power | Bloomberg Investigates

Iran, 1979. A revolution against corruption, repression and inequality leads to the birth of a new theocracy, the Islamic Republic of Iran. Over the next four decades, in the face of mounting Western sanctions, a new

Iran. Over the next four decades, in the face of mounting Western sanctions, a new military and political class would emerge.

Because of sanctions, the Iranian regime is in dire need of middlemen.

These folks have played a crucial role in bypassing sanctions against Iran and Russia. Bloomberg reporting revealed how one of these elites, operating under the codename H, would go on to become a power broker in the world's shadow economy. His plan was to turn this business empire into a

global international network, and he was getting there. What we ultimately uncovered was this secretive network that was one of the three biggest oil trading networks for Iran. It's difficult to put a number, but it is tens of billions of

for Iran. It's difficult to put a number, but it is tens of billions of dollars. We realized the network was more than just oil. It was also part of

dollars. We realized the network was more than just oil. It was also part of the arms trade. It goes much further than just Tehran. By the end of it, this amounted to one of the bigger law enforcement actions by the US in the past decade. This investigation uncovers the lengths Iran's

past decade. This investigation uncovers the lengths Iran's elite would go to to consolidate power. Even as Iranians once again call for change. And the world watches as the fate of the Islamic Republic of Iran

for change. And the world watches as the fate of the Islamic Republic of Iran hangs in the balance.

I'm Ben Bartonstein. I'm a senior reporter on the energy and commodities team.

I'm about to try one of my sources who's an insider within the network that we've been investigating. We're talking about the highest levels of government in Iran. The source is understandably quite scared.

They want every precaution taken to kind of hide their identity.

My name is Mehrzad Barujerdi and I was born in Iran. And when I first came to the States, my My goal was to become a petroleum engineer like my father. Iran has been a single

father. Iran has been a single product economy mainly for much of its history, right after the discovery of oil in 1908. It's a discovery that will fuel an historic rise for Iran,

1908. It's a discovery that will fuel an historic rise for Iran, making it a key country of interest for the United States. The oil creates enormous wealth, but it remains in the hands of a select few. By the 1970s, The royal family are seen to live lives of excess in an extravagant palace filled with

gold telephones and Warhol portraits. This is a world apart from the working class neighborhood where a man named Ali Shamkhani comes of age. Ali Shamkhani is a very, very important figure. His father was a low-level bazaar merchant. He came from one of the poorest parts of town. He and I are

merchant. He came from one of the poorest parts of town. He and I are both from the same city, right?

At the time of the revolution, he was like 23 years old. But he

went up the political ladder very, very quickly. In 1978,

what starts as a broad coalition calling for an end to corruption and ties with the US becomes a revolution. When there is trouble in Iran, that is trouble for the United States. And there is big trouble in Iran now. The revolutionaries know that oil production is key to power. They announce

an oil strike and threaten action against anyone who defies it. There has been some violence. There has been some individual cases with some Americans where either they were

violence. There has been some individual cases with some Americans where either they were abused or people were throwing stones at them and things like that.

They had put out a list that was pinned to the wall in the mosque in the city that I'm from. and they were saying that we want to assassinate these individuals because they are breaking the strikes. Paul Grimm, 56, an American oil executive, was ambushed and killed on his way to work in Iran today, three assassins with machine guns. At the same time, a few blocks away, an

Iranian executive in Grimm's company was killed too. My father was an oil engineer for the Iranian oil company. He and an American engineer As they were each driving to work early in the morning, they were assassinated in front of their houses. After these assassinations, oil

houses. After these assassinations, oil production came to a total halt. Forty days later, politically speaking, the revolution succeeds.

Though the identity of the assassins is still disputed today, One of the groups credited with carrying out the murders is Mansouroun, a clandestine Islamist guerrilla group.

In the last days of the revolution, they help overthrow the monarchy. The Shah flees the country, Ayatollah Khomeini returns from exile, and the Islamic Republic of Iran is born. Mansouroun endeared themselves to Ayatollah Khomeini, who

born. Mansouroun endeared themselves to Ayatollah Khomeini, who came to rely on them as men of action.

When Khomeini came back to Tehran, these folks made up part of his entourage of bodyguards. And among Mansouroun's members is Ali Shamkhani. But

Shamkhani. But soon, the ideals of Mansouroun come into conflict with Khomeini's vision.

Many members are arrested or executed, but others, like Shamkhani, thrive.

joining a new military force set up to protect the new regime. It's called the Islamic Revolutionary Guard Corps, or IRGC.

When the Iran-Iraq War started a year after, the government came to rely more and more on the Revolutionary Guards in terms of its military muscle. And they entrusted them with a lot of power.

Ali would go on to control Iran's navy. It's a position which, over the next four decades, allows him access to dozens of ports and sea terminals in the Persian Gulf, crucial for evading sanctions put in place by the US and others.

Revolutionary Guards would use those ports to bring in military armaments or cigarettes or whatever, you know, that was hot in the black market to make a killing. And of course, Mr. Shamkhani, he knows where all the bodies are buried,

a killing. And of course, Mr. Shamkhani, he knows where all the bodies are buried, all the tricks that the government has learned. And I have no doubt that that knowledge has been passed along to the children.

My name is Mia Maliki. I was the head of the sanctions targeting unit at OFAC, which is an office within the Treasury Department. I was born and raised in Iran. I was born in Tehran. It was a very strict dictatorship. And one

in Iran. I was born in Tehran. It was a very strict dictatorship. And one

thing that I remember is having VHS tape players were illegal.

My dad used to bundle it up with blankets and put it in a closet so it's hidden. And then he would bring it out sometimes and we would watch movies, Hollywood movies. But the way that things kind of changed post-Iran-Iraq war was you were either a part

of that regime inner circle, and if you were outside that, you were part of the 70-80% that were just struggling financially, socially, economically.

Although Iran's theocratic system preaches austerity, the accumulation of wealth is tolerated, but never power. In the 2010s, a string of wealthy businessmen are accused of

never power. In the 2010s, a string of wealthy businessmen are accused of defrauding the Iranian state and sentenced to death. And through a quiet purge of the private sector, businesses are seized or sold off to the children of ministers, generals or clerics. The regime

clerics. The regime learned they need to rely on folks that they can actually trust and who is better than family members of key regime officials. You end up with family members to take over very lucrative sectors. Oil, petroleum,

petrochemical, metal sectors, the natural resources that exist in Iran.

This nepotism is so widespread a new term is coined. Agazadeh, or children of the elite. Most go under the radar, but in 2008...

elite. Most go under the radar, but in 2008...

Ali Shamkhani decides to introduce one of his sons on national television. He's not here, he's not here. He's going to get his father. What's his name? Hussain

Shamkhani is Ali Shamkhani's son. He looked very sharp and somehow shy. How many

years have you been? 24 years. I remember

that TV host asked him so you didn't find him a job in the government. I remember

the government. I remember trying to understand what he was doing.

It's not like a startup. It's not like he's opening a clothing line. It was

very clear to me when he said he's in the private sector, being the son of Ali Shamkhani, he's probably sitting on top of some huge economic enterprise somewhere.

The story really began for me in early November of 2023. I was at this event in Dubai and I bumped into this source of mine who was telling me about this relatively new company that operated from the office right next door. The key bit that caught my attention was this company,

next door. The key bit that caught my attention was this company, which was quite secretive, was run by the son of a prominent IRGC commander and they were active in trading oil. Coincidentally, just a few weeks prior, a separate source had mentioned the same exact company and how they'd ballooned from

about five employees to 200 practically overnight. The company is Milavus Group.

From offices in Dubai, Switzerland and Romania, it openly trades in oil and other products.

What struck me the most was just the mystery around the owner.

The code names we started to hear was H or Hector. Good evening, this is Ben Bartonstein from Bloomberg News. Some folks would sidestep the question entirely. Is it okay for me to record this conversation? And others, they didn't even

entirely. Is it okay for me to record this conversation? And others, they didn't even know who was the boss. Or they would say, I'm not allowed to talk about it. There was a bit of a concern about how powerful this individual

it. There was a bit of a concern about how powerful this individual was that they worked for. You hear that and you just want to understand who is this person. Within the internal system, the bio page for the top boss said H slash Hector. If an employee were to

question that, they would get a stern talking to from HR and be advised to never ask that type of question again. Certainly there's secrecy in these types of shadow networks to begin with, but this level of secrecy was on another level.

In the first few months, it felt like you're banging your head against the wall trying to get the answer to that question.

But then something changes. In 2024, amidst stricter sanctions on Russian oil, Milivus abruptly sheds dozens of jobs. And suddenly, more sources inside the network are willing to talk. You had other folks now looking over their shoulder wondering, what if I'm next? Suddenly you're going from two weeks of not getting any

new leads to suddenly every day there's a new breakthrough. And after talking with several dozen sources month after month after month, we came to the conclusion that H could really only be one person. Hussein Shemkhani.

It's early 2022. A cargo ship is impounded in India on charges of possessing false documents.

It's an event that goes largely unnoticed, until a series of Iranian reports reveal that the ship belongs to the Admiral Group, owned by Hussein and Hassan Shamkhani, the sons of Ali. The tanker, when he was detained to India, That's when the news really

of Ali. The tanker, when he was detained to India, That's when the news really broke. Shamkhani, who for years was a politician, and

broke. Shamkhani, who for years was a politician, and always came up as being a very national security, very loyal regime actor. All of

a sudden, he's involved in petroleum trade, and his son's name started kind of floating.

Starting with Admiral Group, the company that owned the tanker in India, the US Treasury begins to map out Hussein Shamkani's network. Hussein's business was really picking up. They're setting up companies, it was growing. Slowly, our understanding of the

up. They're setting up companies, it was growing. Slowly, our understanding of the scope of this network grew. The key company that he really started out with was called Admiral Group, which was an homage to his father's role as a rear admiral.

After this India incident, the network really shifted its focus to Dubai, and a new web of companies were set up in the process, with Milivoos really being at the heart of it all. The list keeps expanding by the day, basically.

Sometimes I wonder if he knows how many companies or tankers fall under these layers of companies, this network that he has established. But the numbers that we had were about 115 companies and tankers and individuals who were part of this network. This sprawling network of companies offers access to the world's ports

network. This sprawling network of companies offers access to the world's ports and commodities markets, making it easier to covertly trade Iranian and Russian oil.

According to multiple sources spoken to by Bloomberg, concealment methods are employed throughout the network.

Crude oil is blended and rebranded to hide its real origins. Payments are routed through shell companies and barrels are transported via a dark fleet of ships, according to the US Treasury's Sanction Office. Hussein, he felt very comfortable in Iran being the son of Shamkhani. That gave him a false perspective that

he can also operate freely with that sense of power and comfort outside Iran. And he had set up layers and layers of companies to get into

outside Iran. And he had set up layers and layers of companies to get into the formal market, and that confidence is what really failed him. That brought him into the spotlight.

My name is David Tannenbaum. My job has been to track the dark fleet, to track how persons under sanctions, whether they are from Iran or Russia, evade those sanctions. We ran into Hossein Shemkhani since the war started in

sanctions. We ran into Hossein Shemkhani since the war started in Ukraine. The main companies that we focus on that he runs are Coban Shipping, and

Ukraine. The main companies that we focus on that he runs are Coban Shipping, and one is OceanLink Shipping. We've seen them move between the different fleets, which kind of signifies that they're owned by the same persons. And

between them, they've likely raised billions of dollars, most likely on behalf of the IRGC.

So this is one of the vessels that just came onto station. She's pretending to be off of Basra, but in actuality, she's probably meeting up with another vessel to take on Iranian crude. They love to do it in this area because it's close to Iraq, and they can pretend that the crude is Iraqi as opposed to Iranian crude.

is one of the most prolific users of the Dark Fleet. Every day we are adding new and new vessels. It's

always this cat and mouse game where we're figuring out how they're evading sanctions, and then it's their job to replace it and our job to keep up with what they're doing. Tannenbaum estimates 10% of the world's tankers are part of the Dark

they're doing. Tannenbaum estimates 10% of the world's tankers are part of the Dark Fleet. In a previous documentary, Bloomberg filmed two oil tankers conducting

Fleet. In a previous documentary, Bloomberg filmed two oil tankers conducting illicit ship-to-ship transfers off the coast of Greece. The ownership of the aging vessels was unclear, and only one ship appeared on global tracking systems. Shankani's network has used similar evasion tactics, generating tens of billions of dollars from the sale

of Iranian and Russian oil to countries including China and India. This network that we uncovered was one of the three biggest oil trading networks for Iran. The moves that this network makes, which are in the billions of dollars per year, can influence the amount that the average consumer might pay at the pump. So really, it goes much

further than just Dubai and Tehran. All the evidence points to Hussain Shamkhani directing the network's activities. He was approving bank transfers. He was explaining how the company was thinking about high-level hiring and firing decisions and kind of the future of the company at large. The documents just added another

layer of confirmation to the fact that it was in fact H who was calling the shots. There was a clear authority in the messaging that this was the top

the shots. There was a clear authority in the messaging that this was the top boss. But in emails to Bloomberg, Hussein Shamkhani denies all involvement.

boss. But in emails to Bloomberg, Hussein Shamkhani denies all involvement.

It was peculiar when we sent our initial request to Mr. Shimkani. We addressed it to Hussain Shimkani, slash H, slash Hector at Milibus Group. And

ultimately, his lawyer confirmed that he received that very letter.

So how did they know how to send it to him then? And could you explain that relationship?

His lawyer is telling me on the phone, while agreeing to be on the record, that he knows Milibus Group. So much of this activity is in the gray area.

You can understand if you put yourself in the shoes of Hussein Shemkhani, why he would feel that he's perfectly legitimate and has every right to be an active player in the Iranian oil market. But of course, from the US vantage point, they would say this is circumventing sanctions. And if you were to ask a lot of Iranians, they would pose the question, why is this very wealthy regime

insider family profiting the most from this trade and not the Iranian people?

And it's not just about oil. A Bloomberg investigation has found that parts of Shamkani's network, including a company called Cryos Shipping, could be dealing with a different, deadly cargo. We realized the network was more than just oil. It was also part of

cargo. We realized the network was more than just oil. It was also part of the arms trade. Something that...

has become increasingly prevalent for countries navigating sanctions, which include Iran and Russia, is that it's increasingly difficult for them to transact in the US dollar. So as a result, they must turn oftentimes to barter trades. When

it came to the Russia relationship in particular, that involved this network actually shipping weapons and other drone-related parts across the Caspian Sea and getting paid back in oil.

There are two things that Russia needs to make the war happen. The first is to sell oil to get the money to fund this. And the second is to get what they call dual-use goods. These are microchips, they're infrared sensors, they're gyroscopes, all the different components that go in to build, say, the missile that they use to attack Ukraine. A network like this is one of those

perfect synergies, that Iran can sell its oil, and at the same time it can transfer weapons to Russia for profit.

If you want to turn $1 billion into $10 billion practically overnight, the key ingredient is leverage. And for that, you need Western banks. Probably one of the bigger surprises

is leverage. And for that, you need Western banks. Probably one of the bigger surprises was how much Western financial exposure there was to this network. The oil handled by Shamkhani's network even reached major global players like BP and Chevron, according to multiple sources and Milivos' own sales material. And some companies in the network had

ties to the world's biggest banks. We're talking BP, we're talking Chevron, other major Western companies. When we looked at their banking relationships, They had relationships with Standard

Western companies. When we looked at their banking relationships, They had relationships with Standard Chartered, JP Morgan, other major US, UK and European financial institutions. You

know, it says quite something about the impressive nature of how this network was able to camouflage themselves. One way to access these Western financial institutions was through the use of hedge funds. With offices in London, Geneva and Dubai, and funding from lenders such as JP Morgan, Ocean Leonid would prove to be a vital cog

in the Shamkani Empire. Ocean Leonid was presented as the key hedge fund for this network. Basically, they were leveraging the proceeds from some of the oil trades conducted out of Dubai. Those funds, some of them were getting funneled to their offices in London and Geneva, and then they were

trading the proceeds, some of them in the commodity space, some of them in other assets. But the goal was really to take this pot of oil proceeds and make

assets. But the goal was really to take this pot of oil proceeds and make it many multiples of that. Sources connected to Shamkani's network are hesitant to speak out, but one former Ocean Leonid employee makes contact.

After our story on Ocean Leonid, in a matter of weeks, the U.S. began investigating

the relationship between the Western financial institutions and the hedge fund, and then in short order, the U.K. shut down the operations of the hedge fund in London.

Had the hedge fund stayed operating, this network could have kept churning out 15 to 20 billion dollars a year in oil revenue, and then turn those tens of billions of dollars into hundreds of billions of dollars. Of course, that dream faded with the collapse of Ocean Leonid.

For far too long, all the way back to 1979, to be exact, nations have tolerated Iran's destructive and destabilizing behavior in the Middle East and beyond. Those days are over.

beyond. Those days are over.

After a gradually hardening stance, in July 2025, the US announced the largest Iran-related sanctions since 2018. It targets 115 entities in nearly two dozen countries. And for the first time, the US names Hossein Shamkhani.

I keep remembering the first time he showed up in that TV interview with his father. This shy kid.

father. This shy kid.

And then he gets into this business empire. It was evolution. It was watching Breaking Bad. It was Walter White becoming Heisenberg.

Bad. It was Walter White becoming Heisenberg.

If you think of an ideal scenario to uplift the livelihoods of the average Iranian, it would be one in which the oil industry can really support the average Iranian.

Instead, the reality is that just a few families really profit from this industry, one of which being the Shemkhani family.

As the biggest and deadliest anti-government protests since 1979 erupted in Iran this year, some called for a return of the Shah's son.

It is ironic to see how a revolution that was carried out in the name of justice, equity, etc., against what was considered to be Shah's corrupt, Western-led type of a political system, we have ended up At this point, four decades later, at a time when the new revolutionary elites have become

even more despised than the regime that they overthrew in the eyes of the average citizen because of the infringement on rights of average citizens. Revolutions have a dynamic of their own, and

average citizens. Revolutions have a dynamic of their own, and unfortunately, in most revolutions, it is the most brutal elements that end up becoming the new elite.