How Hossein Shamkhani, Iran’s Oil King, Entered the Western Financial System
How Hossein Shamkhani, Iran’s Oil King, Entered the Western Financial System. Bloomberg. Along the winding roads that stretch along the palm-covered shores of Dominica, a chain of luxury hotels under construction can be seen. A few miles to the north is the future site of the Portsmouth harbor, a project aimed at attracting luxury cruise ships to the island.
These projects are a testament to a decision Dominica made three decades ago regarding the Citizenship by Investment (CBI) program. In short, this small Caribbean country has offered its passports to foreigners in exchange for hefty sums. This program has injected billions of dollars into the country’s economy and provided an easy alternative nationality to individuals whose wealth origins might raise concerns in the economic community.
Among the eager clients of this multi-hundred-thousand-dollar program were a group of Iranians, including Hossein Shamkhani, the enigmatic head of a business empire managing significant oil and arms deals for Tehran and Moscow. He also oversees a hedge fund that operates in global financial centers.
This information was provided to Bloomberg by individuals who wished to remain anonymous for security reasons. The Dominican documents obtained by Shamkhani and his team were part of a series of actions that allowed Iranians to be accepted by Wall Street banks and major Western oil companies for transactions. Shamkhani, whose father is a senior advisor to the Supreme Leader of the Islamic Revolution, has made considerable efforts to keep his business interests confidential.
The following report, based on interviews with over 40 individuals familiar with Shamkhani’s network and the result of a year-long investigation, explains how Shamkhani successfully integrated his companies into the Western financial system while key entities associated with him managed Iran’s arms attacks on Russia. In the continuation of this report, you will read about how he managed to operate from London to Geneva, Dubai, and Singapore, and maintain relationships with the biggest names in the global financial world. A lawyer representing Shamkhani, who continuously challenged Bloomberg’s reports on his business affairs, did not respond to specific questions in this report.
Malta and Cyprus, among the countries that sell their citizenship in exchange for investment, play a role in this story. Additionally, senior officials from the United Arab Emirates, a well-known lobbying firm located a few blocks from the U.S. Treasury Department in Washington, and a covert logistical network that transports billions of dollars worth of Iranian and Russian oil across the world’s oceans were part of these relations. The banking challenges were Dominica’s first phase.
The banking challenges were Dominica’s first phase.
Shamkhani, born in Tehran a few years after the Iranian Revolution, grew up in the shadow of the Iran-Iraq war. His father held senior government positions at various times, including commander of the Islamic Revolutionary Guard Corps navy and Minister of Defense, and later was appointed as the Secretary of Iran’s Supreme National Security Council.
Encouraged by his father, young Shamkhani decided to pursue an independent path in the private sector. After studying in Moscow and Beirut, he returned to Iran, earned an MBA, and then founded the Admiral Group trading company with his brother Hassan, which referred to his father’s naval rank.
Dubai, a city across the Persian Gulf with a large Iranian expatriate population and a welcoming business approach, was recognized as a suitable base. However, given his father’s positions and his own nationality, Shamkhani was known as a political figure with ties to sanctioned entities, which were red flags for most major banks.
Dominica, an island almost the size of New York City and home to about 70,000 people, offered a solution. This island, which has offered one of the most flexible Citizenship by Investment (CBI) programs since the early 1990s, had earned billions from this program. Additionally, physical presence in the country is not necessary, and CBI transactions are typically conducted through private intermediaries in Dubai, according to Kristin Surak, a professor at the London School of Economics and Political Science and author of the book ‘Golden Passport’.
According to individuals with direct knowledge of the matter and company records seen by Bloomberg, Shamkhani and several of his associates were able to obtain Dominican passports by paying a fee. Some even changed their names, a process that was completely legal at the time and conducted through the island’s official documentation.
The red carpet alone was not enough.
Many banks required a second source of identification to comply with Know Your Customer (KYC) principles. Their Iranian passports were clearly unsuitable. To alleviate these concerns, Shamkhani and his team used their Dominican documents to obtain additional passports from European Union member states, including Malta and Cyprus.
With multiple travel documents under pseudonyms and alternative nationalities, Shamkhani’s network was able to pass due diligence checks at some of the biggest names in international finance, which would otherwise have raised concerns due to his place of birth, political status, and connections to sanctioned entities.
In addition to Shamkhani, other Iranian nationals who obtained Dominican passports included ship captain Alireza Derakhshan, known as Captain D, who closely collaborates with the Milos Group Ltd trading company, Mahdiar Zare Mojtahedi, a senior manager at Ocean Leonid Investments hedge fund, and Hossein Ghorbani-Zadeh, a senior associate at the Golden Nest Group who helped Shamkhani establish global banking relationships.
According to data obtained from the Government Accountability Project, Derakhshan received Dominican citizenship in 2009. He also appears as a Dominican national in Turkey’s commercial registry. In the UK, Companies House documents show Zare and Ghorbani-Zadeh as Dominican citizens. In all three cases, there was no mention of Iran in the documents reviewed by Bloomberg.
Details about citizenship have become more concealed in recent years as the Dominican government has refrained from publishing the names of foreign recipients in its official gazette, past or present. Transparency in this area ended in 2019 when opposition politicians accused Prime Minister Roosevelt Skerrit, who has been in power since 2004, of profiting personally from the sale of these passports. He defended the program as strong and very transparent.
Some foreign banks cut ties with Dominica to reduce risk. According to Lennox Linton, a local legislator who has raised concerns about the CBI, in July 2023, the UK revoked visa-free travel for those holding Dominican passports, which sounded alarms in the Caribbean CBI industry. Meanwhile, the European Parliament is debating ending such programs, citing reasons like fraud and weak oversight.
This program should be banned, said Sophie in ‘t Veld, a Dutch member of the European Parliament for 20 years. It’s a red carpet to Europe.
Representatives of the governments of Dominica, Cyprus, and Malta did not respond to requests for comment, nor did Ghorbani-Zadeh. Derakhshan and Zare also declined to comment. Dominica’s program acted as a launchpad for Shamkhani and his associates to transform the Admiral Group into a sprawling multi-billion-dollar business empire with dozens of companies.
However, the second phase, involving Emirati diplomats, Washington lobbyists, and Iranian agents, was essential to maintain these companies’ operations.
Iran’s Oil King and the Secretive Trade Networks. The secretive trader Hector is known as the global oil king of Iran.
The UK seeks to shut down a company linked to Iran’s oil network in London.
Oil prices indicate traders’ indifference to US sanctions.
Iran’s Oil King’s hedge fund manages millions from London.
Dubai’s DIFC financial center suspended activities of companies linked to Iran’s Oil King.
The secret transport hub delivering Iranian crude to China.
US probes JPMorgan’s ties to Iran’s Oil King’s hedge fund.
Iran’s Oil King’s hedge fund prepares to close its London office.
Iranian oil trader Hector plays a key role in arms sales to Russia.
Luxury Real Estate
Over the past decade, Shamkhani’s business empire has become an influential player in global commodity markets. Each year, billions of dollars in oil wealth flow through his network, disappearing into a maze of offshore bank accounts and luxury real estate.
In Dubai, he could leverage family connections for business when needed while interacting with bankers, models, and musicians under the alias Hector in the city’s financial districts.
However, in January 2020, his business activities were jolted when the United States sanctioned his father. This event served as a wake-up call for young Shamkhani and his associates.
On one hand, his family had practically benefited from the Trump administration’s maximum pressure strategy against the Tehran regime, as this strategy placed Iran’s strategic industries increasingly in the hands of politically connected elites. According to Ali Vaez, the Iran Project Director at the International Crisis Group in Washington, this has led to accusations of corruption and mismanagement by some Iranians who believe the country’s oil revenues should be allocated to support a broader population, especially during economic crises and fuel shortages.
Vaez said the Shamkhanis are a prime example of sanctions profiteers who have become wealthy from this situation and do not want these sanctions to be lifted.
At the same time, young Shamkhani did not want to face the problems arising from individual sanctions or enforcement actions against his network’s companies.
Between 2022 and early 2024, business was going well for him.
The market disruptions following Russia’s invasion of Ukraine created an opportunity for companies like those managed by Shamkhani, which had strong government connections and a higher risk tolerance. However, these conditions also brought increased scrutiny. A coalition of governments, including the United States, the United Kingdom, the European Union, and Japan, designed a price cap policy to punish trading companies that support Vladimir Putin’s war machine.
The October 7, 2023, attacks on Israel and the subsequent Israeli invasion of Gaza also drew global attention to financing Iran’s proxy groups, with oil trading companies at the forefront, generating about $35 billion annually for the Islamic Republic. Shamkhani, with his intertwined roots in Tehran and education in Moscow, held a position in both worlds. By April 2024, pressure on him had increased. The United States had sanctioned nearly a dozen ships linked to his network, and fearing further actions, he withdrew large sums from his hedge fund and invested it in luxury real estate, primarily in some of Dubai’s highly exclusive island projects.
According to a Dubai real estate database compiled by the Washington-based nonprofit research organization C4ADS, at least two villas on the private Jumeirah Bay Island, locally known as Billionaire’s Island, have been purchased by members of Shamkhani’s network.
Emirati Friends
While the Biden administration increased sanctions on Iran, Shamkhani benefited from the support of the United Arab Emirates, an influential OPEC member and a long-standing defense partner of Washington in the Middle East. In private talks with American counterparts, some Emirati officials, including Yousef Al Otaiba, the influential envoy in Washington, have expressed opposition to sanctions targeting Shamkhani, citing his father’s constructive role in improving relations between Tehran and Abu Dhabi, which has helped reduce Houthi attacks on UAE soil, according to individuals with direct knowledge of the matter.
Additionally, some Biden administration officials have privately acknowledged that keeping oil prices low and avoiding a trade war with China take precedence over dealing with Iranian oil market whales like Shamkhani. Even when there is political will, policymakers acknowledge that major successes in enforcing sanctions can make their job harder. Bringing down the massive companies controlled by Shamkhani will inevitably lead to the emergence of dozens of smaller companies that may be even harder to control, according to informed sources.
In response to Bloomberg News inquiries, an Emirati official said the country fully complies with UN sanctions and has clear and robust processes for dealing with sanctioned entities, which the government has applied to several companies.
Lobbying in Washington
Meanwhile, Shamkhani organized and funded a campaign to be effective, hoping to convey messages to Western officials that some of his trading companies could avoid regulatory consequences, according to individuals with direct knowledge of the matter.
He approached companies like Corvis, a well-known government relations firm based in Washington, to receive guidance on applying pressure on rival traders while maintaining his own companies, according to individuals with direct knowledge of the matter.
The Middle East office of this lobbyist is located in Dubai’s free trade zone, one of the most sanctioned jurisdictions in the world, allowing the company to closely interact with some market players involved in sensitive shipments.
Corvis’s market insights have enabled the company to hold meetings with US officials seeking fresh information from the UAE. Such discussions have the potential to influence decisions by the US Treasury’s Office of Foreign Assets Control, while Corvis discloses its work on behalf of a range of clients, from the Saudi government to the commodities giant Mercuria Energy Group Ltd. Its connection to Shamkhani’s network has not been disclosed under the Foreign Agents Registration Act.
Disclosure requirements for companies supporting foreign citizens are generally less stringent than for those representing foreign governments, although this depends on the nature of the work. According to informed sources, Corvis has met with US Treasury officials to discuss sanctions evasion in Dubai while downplaying the role of some Shamkhani network companies.
This raises questions about how lobbying by politically connected Iranians might be concealed by not disclosing it or layering it through private companies, said Gabriel Noronha, a former State Department official who studies foreign influence. Spokespersons for the US Treasury and Justice Department declined to comment. Corvis representatives also did not comment.
A Changing Tide. There are signs that the tide is turning against Shamkhani. In recent weeks, Dubai’s International Financial Free Zone has suspended several companies in his network, and his hedge fund is under investigation by the US Treasury Department, according to Bloomberg.
Late last month, Ocean Leonid informed its employees that the company’s London operations would enter liquidation.
The US Treasury Department has also increased its sanctions on some ships and companies within Shamkhani’s network in recent months while refraining from imposing individual sanctions, according to informed sources.
And of course, there is the potential future administration of Donald Trump. The US President-elect has promised to completely halt the Islamic Republic’s oil exports and has chosen Mike Waltz and Senator Marco Rubio, known hardliners against Iran, for two key positions in his cabinet. ‘Our sanctions are not broad enough, and they need to be,’ said John Bolton, former US National Security Advisor in Trump’s first administration. ‘You need comprehensive sanctions that say anyone trading with Iranian oil is a sanctioned entity.’
A collaborative work by Jim Wyss, Erkan Erci, Jack Wittels, Yongchang Chin, and Tiwa Adebayo.