An Iranian tycoon convicted of money laundering and embezzlement has returned to the oil business, Iranian news outlets reported, just as looming sanctions may soon force Iran to devise new means to avoid international scrutiny over its economy.
Iranian media reported Tuesday that Babak Zanjani has been allocated oil cargoes for export, using a cryptocurrency as collateral, even though the Central Bank of Iran has already declared the cryptocurrency to have no legal validity, economic value or financial backing.
The transaction was carried out through Naftiran Intertrade Company (NICO), a subsidiary of Iran’s Ministry of Petroleum, Eghtesad Online reported.
“NICO has transferred millions of barrels of oil to Babak Zanjani, while Zanjani not only has a huge debt to the government, but has also not repaid a large part of his past debts,” the report added.
Iran’s Ministry of Petroleum and NICO accepted Zanjani’s “invalid cryptocurrency” worth an estimated $300 million as collateral, ILNA news agency reported.
Iran's resort to Zanjani comes as the heavily-sanctioned country's crude oil exports dropped to about 1.2 million barrels per day in the first half of August, according to a report by Vortexa Energy Analysis Company.
Zanjani’s rise and fall remain among the most contentious episodes in Iran’s economic history. His net worth was once valued at $13.5 billion and he was considered a central figure in circumventing sanctions under President Mahmoud Ahmadinejad (2005–2013).
His networks laundered billions through complex schemes spanning Turkey, Indonesia and Central Asia.
Arrested in 2013, Zanjani was convicted of embezzling $1.9 billion in oil revenues. He was initially sentenced to death, later commuted to 20 years in prison.
Sanctions coming
“With the snapback mechanism looming, the Islamic Republic has brought back the very person with expertise and a complex network in this field,” Atta Hosseinian, a Berlin-based economic journalist specializing in energy, told Iran International.
Britain, France and Germany have threatened to trigger the so-called snapback mechanism of a 2015 Iran nuclear deal triggering UN sanctions if Iran doesn't make diplomatic concession's by month's end.
Reports in Iranian media have raised concerns about Zanjani’s return to business, questioning how someone with his history can be rehabilitated.
“It can be said Zanjani has returned by order from the top. This does not mean that supervisory and responsible institutions were unaware or uninformed. He has received and will receive a large volume of oil,” Hosseinian added.
On August 11, Iran’s Ministry of Intelligence issued confidential guidance warning ministries and major companies to prepare for the likely return of punitive UN sanctions.
The snapback mechanism, part of UN Security Council Resolution 2231 — which endorsed the 2015 Joint Comprehensive Plan of Action (JCPOA) — allows any party to the accord to accuse Iran of non-compliance.
If no resolution is reached within 30 days, all previous UN sanctions would automatically resume, including arms embargoes, cargo inspections, and missile restrictions.
