A mysterious assassination of a faction leader in Iraq has exposed details of a lucrative oil trade run by what officials and local sources describe as the “Jurf al-Sakhar empire” south of Baghdad, according to information gathered from officials and local residents.
Sources said a “major incident” led to the killing of Abu Saif, believed to be the key figure overseeing the trade in smuggled crude oil, its refining and the sale of its derivatives.
Officials, who requested anonymity because of the sensitivity of the matter, said Abu Saif was likely targeted by a drone strike, coinciding with a broader security escalation in Iraq linked to the war on Iran.
The strike is believed to have been carried out by the United States or Israel, as military aircraft of various types were seen flying intensively over several parts of Iraq throughout the previous week.
Sources said the flights were intended to track groups and individuals already involved in the conflict.
Since Feb. 28, 2026, Iraq’s skies have turned into a crowded theater of drones, attack helicopters and missiles launched by the opposing sides in the regional confrontation: the US and Israel on one side, and Iran and its Iraqi proxies on the other.
Backbone of militia finances
Abu Saif was a shadowy operator who largely worked behind the scenes. Sources said he began as a member of the Mahdi Army, the militia once loyal to Muqtada al-Sadr, before splitting with others and joining factions whose influence has since expanded.
Over the past decade, he has become a central coordinator of specialized operations tied to oil trading, building networks of intermediaries across northern and western Iraqi provinces.
These intermediaries helped obscure his factional ties within what sources describe as Iraq’s “large shadow oil market.”
A person familiar with the parallel oil market described Abu Saif as “one of the nerves of the parallel economy of Iran-aligned groups.”
As the business expanded and the network widened, Abu Saif oversaw refining oil, selling it on the local market, and supplying Iraqi Kurdistan, eventually emerging as one of what sources called Iraq’s “oil kings.”
His network controlled several mobile refineries, known locally as “furnaces,” which produce petroleum derivatives from crude oil siphoned through illegal punctures in major pipelines.
A former oil engineer said these units are small, mobile refining systems designed for quick installation and transport.
They rely on simple distillation equipment that includes heating tanks, small distillation towers, cooling systems and storage tanks that separate gasoline, kerosene, diesel and other products.
Despite their crude design, the operations generate huge profits. But they lack safety and environmental standards, making them vulnerable to explosions and causing severe pollution. The resulting fuel is often low quality and harmful to vehicle engines, the engineer said.
The furnaces also leave behind distinct black stains that damage soil and groundwater, revealing where they have operated.
“Jurf al-Sakhar furnaces”
Security sources said such furnaces spread in areas that experienced security turmoil after 2014, where armed groups and smugglers used them to refine oil extracted from small wells or siphoned from punctured pipelines.
The account is based on remote interviews with security and local sources. Field verification remains difficult because Jurf al-Sakhar has largely been closed to journalists and researchers for years.
The town south of Baghdad became a key hub for these operations because strategic pipelines linking southern oil fields with refineries and stations in central and northern Iraq pass through it.
Jurf al-Sakhar became a major stronghold for Iraqi factions in 2014, when military operations were launched to retake the agricultural town from ISIS fighters. While Shiite factions expelled the militants, around 120,000 civilians were forced to leave.
In the years that followed, the town — once dependent on agriculture — evolved into a complex hub for military and intelligence operations run by armed factions.
According to sources, surrounding farms offered safe cover for mobile refineries, tanker fleets and specialized equipment operated by workers with oil-sector expertise.
Clients of the “oil king”
Sources described a structured network behind Abu Saif’s operations. Products refined in the furnaces were loaded onto tankers that carried no official movement permits and transported to private refineries or facilities with government operating contracts that require petroleum derivatives, such as asphalt plants.
Normally, tanker drivers must carry documents — including official permits — allowing them to pass through checkpoints between Iraqi provinces. But sources said Abu Saif had enough influence to move shipments without interference from security or government authorities.
Dozens of contractors and intermediaries formed what sources described as an army of agents working for the oil king, handling every stage of the process — from operating and relocating furnaces to distributing products to factories and refineries. Many of these intermediaries operate in northern and western Iraqi cities.
The final deal
About a month before his assassination, Abu Saif completed what sources described as his final deal.
They said the network sold about 600,000 tons of oil products, worth roughly $120 million, with nearly half going to the local market.
It remains unclear how the network collects or stores the money. But sources said the deals represent pure profit, since the crude oil is siphoned illegally from pipelines at no cost.
Iraqi authorities periodically announce the dismantling of sites used to recycle and smuggle petroleum derivatives, seizing tankers and illegal refineries across the country.
In some cases, preliminary investigations reveal small networks led by oil traders, operators and complicit security or military officers.
Since 2018, oil smuggling by Iraqi militias has drawn increasing attention from US authorities, prompting Washington to sanction individuals and networks accused of involvement in the factions’ economic activities.
Among them is businessman Salim Ahmed Said, sanctioned by the US Treasury Department in 2025 for running a network of companies that sold Iranian oil as Iraqi oil using front companies and ship-to-ship transfers to conceal the shipments’ origins.
Washington also sanctioned businessman Walid Khaled Hamid al-Samarrai, accused of running a network of tankers and shipping companies used to smuggle Iranian oil and blend it with Iraqi crude before marketing it internationally.
Sources said the oil king exported large quantities of heavy derivatives, particularly black fuel oil, to regional networks that blend them with Iranian oil to facilitate exports using altered shipping documents.
The “Jurf empire”
Sources believe Abu Saif’s assassination during the war on Iran was likely linked to his involvement in military activities targeting US interests from within Jurf al-Sakhar.
Political sources said Shiite armed groups received orders from Iran’s Revolutionary Guards after the killing of Iran’s supreme leader to carry out operations aimed at damaging the US and its allies and targeting the most significant objectives.
Although Abu Saif’s main role involved oil trading and managing the furnaces hidden in Jurf al-Sakhar’s farms, his killing came after his commercial activities intersected with military assignments, which may have included launching explosive drones from the town.
The overlapping roles illustrate how Iraqi factions have built a semi-integrated empire inside Jurf al-Sakhar, combining economic and security functions.
According to sources, the enclave includes missile and drone depots, workshops to test and manufacture improvised explosives, farms, fish lakes, mobile refineries, command and intelligence centers and fortified prisons.
The area also serves as an alternative regional headquarters for units of Hezbollah and advisers from Iran’s Revolutionary Guards, the sources said.
