The economic pipeline supplying liquefied petroleum gas (LPG) to Sri Lanka faces new complexity following sweeping sanctions imposed by the U.S. government on a network of entities, including two Dubai based firms, for their role in facilitating the sale and shipment of Iranian energy products. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the sanctions, citing that the network generates billions in revenue for Iran and its affiliated groups.
The action directly names UAE based Markan White Trading Crude Oil Abroad Co. L.L.C and Slogal Energy DMCC, stating they "play a key role in enabling the sale and shipment of Iranian LPG to Sri Lanka.” The U.S. Treasury, in its press release titled Treasury Dismantles Key Elements of Iran's Energy Export Machine, detailed how the network operates, pointing out that in 2024 and 2025, Slogal purchased Iranian LPG that was delivered to "end users in Sri Lanka and Bangladesh." The document specifically noted a 2025 delivery of sanctioned Iranian LPG to Sri Lanka by the Panama flagged vessel GAS DIOR. The Treasury stated the sanctioned entities are operating in the petroleum sector of the Iranian economy, often employing shell companies and a "shadow fleet" to obfuscate the origin of their cargo.
The immediate implication of this designation is that all property and interests in property of these firms that are in the United States or in the possession or control of U.S. persons are now blocked. Crucially, the move heightens the risk for any foreign entity that continues to transact with the sanctioned companies. U.S. Treasury rules prohibit U.S. persons from engaging in any transactions with the blocked entities, and foreign financial institutions and businesses involved in such trades risk exposure to secondary sanctions for material assistance. For Sri Lanka, which has increasingly relied on spot market purchases to meet its domestic cooking gas demand, the designation potentially limits the pool of available suppliers and shipping routes, adding a layer of compliance risk to future energy procurements.
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