Hector, an Iranian oil trader, plays a key role in selling arms to Russia
According to Bloomberg, Hossein Shamkhani, son of Ali Shamkhani, a prominent figure associated with the Islamic Republic, has become one of the main players in supplying Iranian arms to Russia. American officials and people familiar with his deals say he is an Iranian oil trader who has secretly embedded himself in the heart of the Western financial system. He is one of the traders responsible for transferring arms to Russia via the Caspian Sea, and it is said that he assists Moscow in the war against Ukraine.
Based on information from more than a dozen American, British, and European officials, as well as individuals familiar with his transactions, Hossein Shamkhani began last year transferring missiles, drone parts, and dual-use goods via the Caspian Sea with at least two ships through a network of companies he oversees, including Crios Shipping LLC based in Dubai. Due to the sensitivity of this information, these individuals preferred to remain anonymous.
According to these individuals, Moscow pays for these shipments with oil, a form of barter trade that has become increasingly common due to U.S. and European sanctions against Russia and Iran.
These deals, coinciding with Russia’s increased use of Iranian weapons in the attack on Ukraine, reveal another aspect of a vast global trade network that has significantly enriched Shamkhani. His father held the longest tenure as Iran’s Defense Minister and remains a senior advisor to the leader of the Islamic Republic.
Shamkhani’s extensive network
According to informed sources, Shamkhani manages more than a quarter of the total volume of Iranian arms delivered to Russia. His empire also includes an investment fund with offices in London, Geneva, and Singapore, as well as a trading company in Dubai that has collaborated with major Western oil companies.
Iran and Russia have confirmed their increased defense cooperation, although details have not yet been disclosed. While the bilateral arms trade exposes both countries to potential Western sanctions, it is not illegal.
John Bolton, former U.S. National Security Advisor, said in an interview, ‘My impression is that Shamkhani’s network is linked to drone contracts for use in Ukraine.’ Bolton now heads the Foreign Policy Research Institute in Washington.
Representatives of the Iranian and Russian governments, as well as Crios, did not respond to repeated requests for comment. A lawyer representing Shamkhani, who has consistently challenged Bloomberg’s reports on his business activities, declined to comment on the details of this story in an email response.
Caspian Sea ships
Since mid-2023, several ships belonging to Crios, which previously operated on Mediterranean and Black Sea routes, have suddenly been transferred to the Caspian Sea and have been continuously traveling between Iran and Russia since then.
These ships include the Sea Castle, known as Tuka, and the Sea Anchor, known as Roja, although these are not the only ships in use.
This year, both ships have made at least five trips from Iranian ports to the Russian port of Astrakhan. According to Bloomberg, these ships are small by international standards but sufficient for carrying arms on short trips in the Caspian Sea, with a carrying capacity of 3,000 to 4,000 tons, roughly one-hundredth the capacity of giant container ships that transport goods across the world’s oceans.
The Sea Anchor, which is 108 meters long, was built in 1984 in Romania, one year after the Sea Castle, which is one meter shorter and was built in the former Soviet Union.
A database maintained by SP Global did not list the registered country for either of these ships. Documents collected by the maritime intelligence company Pole Star Global show that both ships have used the flag of Palau, an island in the Pacific Ocean that is on the international blacklist as a ship registry.
Arms-for-oil trade
The arms-for-oil trade is the latest detail in an annual investigation by Bloomberg into Shamkhani’s business activities. This investigation included interviews with more than 40 people familiar with his operations, as well as a review of confidential documents and corporate records.
Possible route
It is still unclear how much weaponry has been transferred by ships belonging to Shamkhani’s network or where exactly they have been used. According to sources, these weapons are not listed in shipment documents to avoid creating a paper trail.
Shamkhani’s financial empire
Shamkhani controls a fleet with dozens of ships, including tankers and cargo ships, according to people directly aware of the matter. Crios, at the center of these shipments, was established in Dubai in October 2020. According to a federal registry of companies operating in the United Arab Emirates, the company describes itself as an international ship management company but has not disclosed any information about its ownership or management.
This company is part of a group of shipping companies under Shamkhani’s oversight, which includes Oceanlink Maritime DMCC and Koban Shipping LLC. Some employees of these companies work alongside staff from his investment funds and oil trading companies. Most employees simply refer to Shamkhani as H or Hector.
Crios has a close relationship with Oceanlink and Koban, which according to David Tannenbaum, a former official in the U.S. Treasury Department’s Office of Foreign Assets Control and an expert in tracking Caspian shipments, operate on behalf of Iran’s Ministry of Defense.
In April, the United States sanctioned Oceanlink and identified 13 ships managed by this company as blocked property, without mentioning any connection to Shamkhani. Representatives of Oceanlink and Koban did not respond to requests for comment.
