When Milavous Group Ltd. secured an office in a luxurious Dubai corporate tower two years ago, the company was relatively unknown. However, it quickly emerged as a key player in global energy markets, largely driven by a businessman that traders refer to as one of the most influential figures in distributing Iranian oil worldwide.
Operating from Dubai, Milavous has reportedly generated billions in sales from commodities sourced from Iran, Russia, and other regions. According to over a dozen individuals familiar with these dealings, the company is allegedly led by Hossein Shamkhani, the son of a former high-ranking Iranian security official who currently advises Supreme Leader Ayatollah Ali Khamenei. Despite his significant influence, few outside of his network know Shamkhani by his real name; he is commonly referred to as “Hector” in trading circles. Even fewer comprehend the extensive reach of his international operations. Shamkhani’s empire is said to account for a substantial portion of Iran’s and Russia’s global oil exports. His network also deals in oil and petrochemicals from non-sanctioned countries, sometimes blending crude from various sources, making it difficult for buyers to trace the oil’s origin, according to sources.
This detailed account of Hossein Shamkhani’s rise in the global oil market is based on interviews with more than three dozen insiders, as well as documents reviewed by Bloomberg News. His ascent highlights the shadowy world of “dark oil” trading, which has flourished since Russia’s invasion of Ukraine in February 2022. It also underscores the growing cooperation between Tehran and Moscow as both nations face heightened sanctions. The United States, meanwhile, faces a dilemma: cracking down on this trade could lead to higher fuel prices domestically, a politically sensitive issue in an election year. Meanwhile, Iran is estimated to earn around $35 billion annually from oil exports, a vital revenue stream that supports various proxy groups in the Middle East.
Though the U.S. imposes restrictions on Iranian and Russian oil sales, many countries, including the United Arab Emirates and China, do not adhere to these sanctions. Shamkhani himself is not under U.S. sanctions, and UAE law does not prohibit companies from trading Iranian or Russian oil. His network also conducts significant business with Chinese buyers, with many transactions settled in yuan, thus circumventing U.S. sanctions.
However, the U.S. has already imposed sanctions on ships believed to be controlled by Shamkhani, and his network—including Milavous—is under investigation by the FBI and the Treasury Department for potential sanctions violations, according to sources and documents seen by Bloomberg.
Milavous Managing Director Mohamed AlHashmi denied any connection between the firm and Shamkhani, asserting that the company complies with all regulations and has no ties to Russian or Iranian interests. Shamkhani himself denied any ownership or management role in Milavous, stating that he is primarily involved in logistics rather than commodities trading. “I am not involved in the commodity industry as Bloomberg suggests,” Shamkhani said in a statement via his lawyer, adding that his business activities are confined to countries not under sanctions.
Despite his denials, Shamkhani’s influence extends so far that oil products supplied by entities in his network have reportedly reached major companies like China’s Sinopec, Chevron Corp. in the U.S., and BP Plc in the U.K., according to insiders and a Milavous brochure reviewed by Bloomberg. Spokespersons for Sinopec, Chevron, and BP stated that they comply with all applicable laws and sanctions.
“Shamkhani’s network is arguably one of the top three oil traders in Iran,” said Saeed Aganji, an Iranian researcher specializing in the country’s commodities industry. “They manage a fleet of dozens of tankers and have hidden business dealings with major oil companies. Sanctioning any of their entities could significantly disrupt the global oil market.”
Sources indicate that Shamkhani oversees a complex web of companies, with Milavous functioning as one of the parent firms. Ownership details are often obscured, and other executives are listed as formal owners and managers, making it difficult to trace direct connections.
Milavous has its main office in ICD Brookfield Place, one of Dubai’s most prestigious corporate addresses, sharing the building with international heavyweights like JPMorgan Chase & Co. and Millennium Management. According to its website, Milavous handles a broad range of products, including oil, gas, petrochemicals, metals, and agriculture. In 2022, the company’s turnover reached approximately $15 billion, insiders say, with total annual sales across Shamkhani-associated entities being even higher.
Despite some setbacks, including unpaid shipments and increased scrutiny from U.S. regulators, Milavous remains robust, continuing to facilitate oil sales from Iran and Russia. As sanctions tighten, Shamkhani appears to be shifting focus to other firms within his network, ensuring that the flow of oil from sanctioned countries continues.
Expanded Analysis:
Shamkhani’s operations highlight the complexities and risks involved in the global oil market, especially when dealing with commodities from sanctioned countries. For investors, understanding the shadowy networks that underpin much of the world’s oil trade is crucial. The potential for U.S. sanctions to disrupt these networks presents both risks and opportunities. On one hand, tightening sanctions could lead to higher oil prices, benefiting producers outside these networks. On the other hand, the increased scrutiny could also create market volatility, impacting the broader energy sector.
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