US sanctions network trading Iranian petroleum to benefit Houthi rebels

The US has sanctioned a network of people and companies for their role in trading Iranian petroleum products that benefit the Houthi rebels in Yemen.

The Houthis worked with the sanctioned companies to maintain shipments of petroleum products into the areas they control in Yemen, where they sell them at a significant markup, the US Treasury Department's Office of Foreign Assets Control said in a July 22 statement.

"The Houthis collaborate with opportunistic businessmen to reap enormous profits from the importation of petroleum products and to enable the group's access to the international financial system," Treasury Deputy Secretary Michael Faulkender said.

"These networks of shady businesses underpin the Houthis' terrorist machine, and Treasury will use all tools at its disposal to disrupt these schemes," Faulkender said in the statement.

Treasury sanctioned Muhammad Al-Sunaydar, as well as three companies in Al-Sunaydar's network that coordinated the delivery of about $12 million worth of Iranian petroleum products to Yemen, the statement said.

Treasury also sanctioned another individual and two companies for importing coal, laundering money and providing cement to the Houthis to fortify military sites, the statement said.

Houthi attacks

The new sanctions come after the Houthis sank two commercial ships in the Red Sea in early July, the first such attacks since a temporary truce announced in May by US President Donald Trump.

Crude tanker traffic in the region had increased in the second quarter as some sanctions-compliant tankers cautiously resumed Suez Canal transits, S&P Global Commodities at Sea analysts said in a recent note.

"An average of 2.12 million b/d of Q2-loading crude volumes passed through the canal, compared to under 2 million b/d in Q1," the note said.

While ship transits through the Bab El-Mandeb Strait from July 10-17 remained roughly unchanged from the prior week, the recent attacks could prompt ship owners and operators to continue avoiding the Suez Canal for East-West trade routes, the note said.