How Ayatollah Khamenei’s Advisor’s Son Rose to Become an Oil Tycoon

Photo : AFP

Hossein Shamkhani, the son of Ali Shamkhani, Iran’s former national security chief and a prominent advisor to Supreme Leader Ayatollah Ali Khamenei, has emerged as a significant player in the global oil market, according to a detailed. Despite the strict US sanctions that have targeted Iranian and Russian oil, Shamkhani has been able to successfully navigate these challenges and establish a thriving international oil trading operation based in Dubai.

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Hossein’s rise in the oil sector is closely tied to his father, Ali Shamkhani, who is a long-standing figure in Iran’s political and military establishment. Ali Shamkhani played a critical role as the Secretary of Iran's Supreme National Security Council (SNSC) for nearly ten years. During this period, he gained considerable influence within Iran’s defense and security apparatus, and even after stepping down, he remains a powerful voice in Iranian policy circles as an advisor to Khamenei. His influence and connections within the Iranian elite have provided a foundation for his son’s business ventures.

While Ali Shamkhani has remained a visible figure in Iran’s political landscape, Hossein has operated more quietly, building a business empire with significant reach in the international oil trade.

In 2021, a relatively unknown company, Milavous Group Ltd, leased an office in a high-end corporate tower in Dubai. Within a short time, Milavous had positioned itself as a key player in the global oil market. The Bloomberg report reveals that Hossein Shamkhani, who is known by the pseudonym "Hector" in trading circles, is the mastermind behind Milavous. From its Dubai base, the firm has reportedly generated billions of dollars by selling commodities sourced from Iran, Russia, and other nations, taking advantage of opportunities created by sanctions on both Iran and Russia.

The company's operations have been marked by a sophisticated approach to circumventing international sanctions. Sources familiar with the company's activities have disclosed that Milavous engages in practices such as blending and rebranding crude oil, making it difficult for authorities to trace the origin of the oil and enforce sanctions. By mixing oil from different sources, they effectively obscure the Iranian and Russian connections, allowing the firm to trade freely in global markets.

Hossein Shamkhani has built a vast network of partners and subsidiaries that have helped him navigate the challenges posed by US sanctions. His trading network is reportedly one of the largest oil trading entities in Iran and is known for exploiting legal loopholes and forming strategic partnerships across the globe. This network includes shell companies and front operations that enable Shamkhani to avoid direct involvement in the business, further shielding him from scrutiny.

While Hossein Shamkhani himself has not been targeted by US sanctions, some of the vessels believed to be associated with his operations have come under the spotlight of the US Treasury Department. However, the scale of his operation, involving over 60 vessels, has made it nearly impossible for US authorities to completely dismantle his trading network.

Under Hossein’s leadership, Milavous has extended its reach into major international markets, reportedly supplying oil to global energy giants such as China’s Sinopec, Chevron, and BP. These companies have been quick to state that they are in full compliance with all relevant laws and sanctions, but the report suggests that Shamkhani’s ability to obscure the true origin of the oil has allowed him to supply these major firms without raising legal red flags.

The ability to operate in such high-stakes markets has made Milavous a key player in global energy trading, despite the legal and political challenges that would typically hinder such a venture.

The US government has faced significant hurdles in its efforts to curtail Shamkhani’s operations. The size and complexity of his network, coupled with the use of legal grey areas, have made it difficult to effectively enforce sanctions. The US has targeted some of the vessels and companies in Shamkhani’s orbit, but the overall impact has been limited.

There are also broader concerns about the potential economic fallout from a more aggressive clampdown on Iran’s oil trade. With Iranian oil exports generating an estimated $35 billion annually, any significant disruption could have wide-reaching effects on global energy markets. This is particularly relevant for the US, where fuel prices are often a sensitive issue, especially in an election year when economic conditions are under intense public scrutiny.

Hossein Shamkhani’s rapid rise in the oil industry is a testament to the power of connections and strategic business practices. His ability to build a multibillion-dollar operation in the face of stringent international sanctions highlights the challenges that governments face when trying to regulate global commodity markets. Shamkhani’s business empire, rooted in Dubai and extending across the world, has become a major force in the energy sector, further complicating efforts to control the flow of sanctioned oil from countries like Iran and Russia.

Sept. 3, 2024 10:13 a.m. 438

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