US Treasury sanctions network smuggling Iranian LPG to Asia

The US Department of the Treasury just made life considerably harder for a network of middlemen who thought relabeling Iranian liquefied petroleum gas as Omani product was a sustainable business model. On June 5, the Office of Foreign Assets Control (OFAC) designated a web of individuals, front companies, and vessels involved in smuggling Iranian LPG to buyers across Asia.

How the network operated

At the center of the scheme were two individuals: Sarbaz Abdul Zada, an Afghan national, and Mohammad Shakol Mihandoust, a Turkish national. Both managed UAE-based entities that exported what OFAC described as millions of barrels of Iranian LPG.

The sanctioned entities read like a directory of purpose-built trade fronts. Butani Trading LLC, Dundlod Trading FZE, ADH Energy FZE, and Sahel Star Oil and Gas Company LLC all operated out of the UAE. Shanghai Qianye Energy Co., Ltd. rounded out the list on the Chinese side of the operation.

The core deception was straightforward: Iranian LPG shipments were falsely labeled as originating from Oman. Six LPG tankers were also designated, four of which flew the Panama flag. One notable shipment involved 750,000 barrels of LPG transported to Bangladesh between August and November 2025.

The sanctions were issued under Executive Order 13902, which specifically targets Iran’s petroleum sector.

A pattern of escalation

This wasn’t an isolated strike. It follows a previous round of designations in April 2026 that targeted a separate network allegedly responsible for moving over three million barrels of Iranian LPG starting in early 2025.

OFAC also extended sanctions to an Iranian exchange house connected to the operation, with currency transfers routed through channels linked to sanctioned banks.

No cryptocurrencies or digital assets were implicated in this particular enforcement action. The entire operation relied on traditional financial mechanisms, front companies, and old-fashioned shipping deception.

What this means for markets and compliance

The designation of Shanghai Qianye Energy Co., Ltd. signals that the US is willing to sanction Chinese entities directly involved in purchasing smuggled Iranian petroleum. Bangladesh, identified as a destination for at least one major shipment, also finds itself in an uncomfortable spotlight.

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