Oil Exports, an Important Component of Iran’s Funding for Terrorism
For over four decades Iran has been considered the world’s leading sponsor of terrorism, with the regime in Tehran using the Qods Force of the Revolutionary Guards to directly support a range of proxy organizations operating against the United States, Israel and pro-Western Arab states across the Middle East. According to estimates, Iran provides hundreds of millions of dollars annually in financial assistance to Hezbollah in Lebanon, Hamas in the Gaza Strip, the Houthis in Yemen and the Shi'ite militias in Iraq; The Iranian regime’s main source of revenue is its energy sector, which generates about half the country’s export income. Iran’s security bodies receive state allocations of oil which they are expected to sell themselves, and the profits from the sales are used to fund their own operations and those of affiliated terrorist organizations; The United States has imposed sanctions on Iran with the objective of restricting its ability to sell oil on international markets. In an effort to circumvent the sanctions, Iran operates a complex network of intermediaries, front companies, and “shadow fleet“ of tankers; With the formation of the Trump administration at the beginning of 2025, the United States renewed its “maximum pressure” policy on Iran, which had been in effect during Trump’s first term between 2018 and 2020. In recent months, the United States has worked to tighten the sanctions while exposing dozens of entities involved in Iran’s illegal oil trade; At the same time, Iranian opposition elements have exposed dozens of companies, individuals and financial entities involved in Iran’s sanction-evasion operations. The exposures reflect the extensive scope of Iran’s illegal activities and provide a broad foundation for expanding the campaign against Tehran’s attempts to evade American sanctions; The aim of this report is to shed light on how the Iranian security bodies use the illegal oil trade to finance support for terrorist organizations across the Middle East, as well as the entities assisting them. It can be assumed that a focused application of sanctions targeting Iran’s ability to export oil could yield two achievements, namely increasing economic pressure on Iran as part of the “maximum pressure” strategy and directly undermining the financing the support and military buildup of the terrorist organizations loyal to the Tehran regime.
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