ERBIL, Kurdistan Region of Iraq - The continuation of illicit oil smuggling at Iraqi ports could result in international sanctions and ensuing deleterious effects, an economist has warned, calling the practice a stark threat to Iraq's economy and international standing.

Nasser al-Kanani, an economic affairs specialist, told The New Region that illegal oil exports are a “serious violation of national sovereignty” and are causing “major economic losses.”

“The increasing oil smuggling either across the border or by manipulating export contracts doesn’t just harm Iraq internally,” Kanani said. “It also puts Iraq’s position in global oil markets at risk and may lead to sanctions that would hurt national revenues and slow down reconstruction.”

His comments came one day after Iraq’s Ministry of Oil said it had detected tankers near two southern ports, Umm Qasr and Khor al-Zubair, engaging in electronic manipulation to hide or alter their true locations

A document from the State Organization for Marketing of Oil (SOMO), whose content was confirmed as veracious by a senior official, said the vessels used “AIS spoofing” technology to hide or alter their real locations. The circular, dated July 27 and signed by SOMO’s Director Ali Nazar al-Shatari, described the ships as “high risk” and suspected of illegal activity such as unauthorized ship-to-ship transfers.

“These tankers were not on SOMO’s official loading schedule,” the document stated, “which raises further doubts about their legal status.”

Kanani urged Iraqi security and judicial authorities to step up efforts to stop smuggling networks. He also called on the international community to help identify those involved.

“This illegal activity could have dangerous consequences,” he said. “We hold the responsible authorities fully accountable in front of the Iraqi people and history.”

The report comes as US officials accuse Iraq of mixing Iranian oil with its own exports, an allegation Iraq has officially denied.

SOMO sent the report to several top agencies, including the Iraqi National Intelligence Service, the Ministry of Defense, the Naval Command, and the Iraqi Ports Company, urging them to investigate and act on the findings.

Earlier in July, The New Region reported that US sanctions targeting Iran-backed oil smuggling networks led to the suspension of operations at Berth 41 of Khor al-Zubair Port in Basra province, with lawmakers and economists warning that such illicit activity can harm Iraq's international standing and damage investor trust.

Economist Nizar Mohi said what happened at Berth 41 is a serious problem in the country’s economic management system. He said Iraq may face more sanctions unless it changes how it manages sovereign ports and facilities.

Mohi told The New Region that shutting down such a large facility brings more than just daily financial losses; it damages investor trust and makes Iraq look like a risky place to do business, especially in the energy sector.