Hector, an Iranian oil trader, plays a key role in selling arms to Russia
According to Bloomberg News, Hossein Shamkhani, the son of Ali Shamkhani, a prominent figure associated with the Islamic Republic, has become one of the main players in supplying Iranian weapons to Russia. According to U.S. officials and individuals familiar with his dealings, 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 weapons via the Caspian Sea to Russia. It is said that he is aiding Moscow in its war against Ukraine.
Based on information from over a dozen American, British, and European officials, as well as individuals closely familiar with his dealings, Hossein Shamkhani began transferring missiles, drone parts, and dual-use goods through the Caspian Sea last year using a network of companies he oversees, including Crios Shipping LLC based in Dubai, with at least two ships. Due to the sensitivity of this information, these individuals preferred to remain anonymous.
According to these individuals, Moscow pays for these shipments in oil, a form of barter trade that has become increasingly common due to U.S. and European sanctions against Russia and Iran.
These transactions, coinciding with Russia’s increased use of Iranian weapons in its attack on Ukraine, reveal another aspect of a vast global trade network that has enriched Shamkhani. His father held the longest tenure as Iran’s Minister of Defense and remains a senior advisor to the Supreme Leader of the Islamic Republic.
Shamkhani’s extensive network
According to informed sources, Shamkhani manages over a quarter of all Iranian weapons 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, which is part of his assets.
Iran and Russia have confirmed an increase in their defense cooperation, though the details have not yet been disclosed. Although the bilateral arms trade exposes these two countries to potential Western government 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 about his business activities, declined to comment on the details of this story in an email response.
Caspian Sea ships
Since mid-2023, several ships owned by Crios, which previously operated on Mediterranean and Black Sea routes, were suddenly moved to the Caspian Sea and have since been continuously traveling between Iran and Russia.
These ships include Sea Castle, known as Toka, and Sea Anchor, known as Roja, although these are not the only ships being used.
This year, both ships have made at least five trips from Iranian ports to the Russian port of Astrakhan. According to Bloomberg information, these ships are small by international standards but are sufficient for transporting weapons on short trips in the Caspian Sea. Their carrying capacity is 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 Romania in 1984, a 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 listed on the international blacklist for ship registration.
Arms-for-oil trade
It is still unclear how many weapons have been transferred by the ships belonging to Shamkhani’s network or exactly where 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 controls a fleet with dozens of ships, including oil tankers and cargo ships. According to people directly aware of this matter, Crios, which is 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 one of a group of shipping companies overseen by Shamkhani, 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 at the U.S. Treasury’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 assets without mentioning any connection to Shamkhani. Representatives of Oceanlink and Koban did not respond to requests for comment.
Challenges of enforcing sanctions
Most recent actions targeting Shamkhani’s network have focused on oil shipments. Efforts to prevent barter transactions in the Caspian Sea face greater challenges.
Enforcing sanctions against these barter networks is much more difficult, especially considering Russia’s historical dominance in this region. These remarks are from Behnam Ben Taleblu, an Iranian security expert at the Foundation for Defense of Democracies. He added that the short-term goal should be to expose these networks to public scrutiny.
