Iran Update, July 31, 2025
The United States sanctioned Senior Supreme Leader Adviser Ali Shamkhani’s son, Mohammad Hossein Shamkhani, and his multinational shipping network on July 30 for generating tens of billions of dollars in revenue for the Shamkhani family and the Iranian regime.[1] The US Treasury Department sanctioned 12 individuals, 52 vessels, and 53 entities, including 15 shipping firms, tied to Hossein Shamkhani’s network to disrupt Iranian and Russian exports of petroleum products and other goods.[2] Hossein Shamkhani manages a fleet of oil tankers and containerships through several UAE-based companies.[3] One of the companies is involved in shipping missiles, drone components, and dual-use goods from Iran to Russia to support Russia’s war in Ukraine in exchange for Russian oil.[4] The European Union recently sanctioned Hossein Shamkhani on July 21 for facilitating Russian oil trade.[5] Hossein Shamkhani’s network has employed sophisticated tactics to evade previous international sanctions on his network.[6] These tactics include frequently changing vessel operators and managers to obscure ownership, falsifying cargo information, creating subsidiary companies in offshore jurisdictions, and turning off automatic identification systems (AIS) during loading. Iran’s ghost fleet vessels frequently turn off their AIS and use falsified documents to transfer Iranian oil.[7] Hossein Shamkhani and his sanctioned associates also use aliases and international passports to bypass financial restrictions in the international banking system.[8] The network has laundered oil revenues through Emirati companies.[9] US Treasury Secretary Scott Bessent noted that these sanctions are the largest action that the US Treasury Department has taken against Iran since US President Donald Trump reinstated his “maximum pressure” campaign on Iran in February 2025.[10]
The United States sanctioned the Zhoushan Jinrun Petroleum Transfer Company, which is located at Zhoushan Port, Zhejiang Province, China, on July 30 for receiving at least six Iranian crude oil shipments.[11] At least three oil tankers and 18 cargo ships that the United States sanctioned on July 30 have visited Zhoushan Port since January 2024, according to commercially available maritime data. Zhoushan Port is one of several ports that Foundation for Defense of Democracies Financial Economics Adviser Saeed Ghasseminejad and Senior Fellow Behnam Ben Taleblu identified on July 30 as being involved in Iran’s illicit oil trade.[12]
Iran increased crude oil exports from 1.7 million barrels per day (bpd) in June 2025 to 1.8 million bpd in the first half of July 2025, according to data reviewed by Ghasseminejad and Taleblu on July 30.[13] Ninety-two percent of Iranian crude oil exports in June went to China, including to Zhoushan and Qingdao ports, while 6 percent of Iranian crude oil exports in June went to the United Arab Emirates (UAE), including to Fujairah and Jebel Ali ports, according to the data. China imported more than 1.8 million bpd between June 1 and 10, according to Vortexa.[14] Another firm that tracks Iranian oil tankers reported that Iranian oil exports to China, including petroleum products and condensates, reached 1.46 million bpd on June 27.[15] Iranian oil exports to China likely decreased in the second half of June due to the 12-day Israel-Iran War. Iranian oil exports still increased in June from around 1 million bpd in May, however.[16]
Iran continues to maintain maximalist demands, including its right to domestic uranium enrichment, which makes it very unlikely that Iran will accept a nuclear deal with the United States that includes a zero-uranium enrichment demand. Iranian Foreign Affairs Minister Abbas Araghchi stated in an interview with the Financial Times on July 31 that the United States “must agree to compensate” Iran for damages it incurred during the Israel-Iran War.[34] Araghchi further demanded that the United States explain why it struck Iran during nuclear negotiations and assure Iran that it will not attack Iran again.[35] Araghchi exchanged messages with US Special Envoy to the Middle East Steve Witkoff during and after the war and has reportedly told Witkoff that the path to negotiations is possible but remains “narrow.”[36] Unspecified Western diplomats told Israeli media on July 30 that the E3 (the United Kingdom, France, and Germany) officials left the July 25 Iran-E3 meeting frustrated and stated that “there is little room for progress” if Iran maintains its right to domestic uranium enrichment.[37] The E3 has repeatedly warned that it may trigger the Joint Comprehensive Plan of Action (JCPOA) snapback mechanism if Iran does not resume nuclear negotiations with the United States and produce “concrete results” in the negotiations by the end of August.[38]
https://www.understandingwar.org/backgrounder/iran-update-july-31-2025
Iran Update, August 1, 2025
Islamic Revolutionary Guards Corps (IRGC)-affiliated Fars News announced on August 1 the formation of a new “Defense Council” in Iran. The new council will reportedly assume strategic responsibilities for Iran's national defense policy, and the regime will soon finalize its structure.[13] Fars News stated that the Defense Council will be part of Iran's “new” defense and security structure.[14] Fars News also announced that the regime will likely appoint Ali Larijani as the new Supreme National Security Council (SNSC) secretary in the coming days.[15] Some Iranian media outlets and social media users have speculated in recent weeks that Larijani may soon be appointed as SNSC secretary.[16] Fars News reported that current SNSC Secretary Ali Akbar Ahmadian would take responsibility for “several special and strategic files.”
This announcement follows a Nour News report from July 30 that there will likely be “imminent changes” in high-ranking Iranian security institutions after “necessary...structural reforms have been implemented.”[17] Nour News has historically been affiliated with the Supreme National Security Council (SNSC) broadly, but has recently increasingly aligned itself with former SNSC Secretary Ali Shamkhani. Iran previously established the “Supreme Defense Council” following the 1979 Islamic Revolution to oversee the Iranian armed forces and manage defense-related matters, including coordinating the armed forces and overseeing national security during the Iran-Iraq War.[18] This announcement also follows a July 29 Nour News op-ed that called on the regime to restructure its decision-making system and establish a “Strategic Command Center” with “cross-sectoral authority” to coordinate security, economic, and diplomatic responses to threats.[19]
A CBS News investigation published on July 31 found that 12 ship-to-ship oil transfers took place in the Riau Archipelago off the coast of Malaysia in a single day as part of Iran's illicit oil trade with the People's Republic of China (PRC).[20] Iran and the PRC use ship-to-ship transfers to obfuscate the origin of Iranian oil. The investigation found that the vessels involved in ship-to-ship transfers used tarps and nets to cover their names and identification numbers. All the vessels also turned off their transponders. The publication of this investigation comes after the United States sanctioned dozens of vessels on July 30 for facilitating Iranian and Russian oil trade.[21] Over 92 percent of Iranian crude oil exports in June 2025 went to China.[22]
The United States sanctioned five entities and one individual based in Iran, Hong Kong, Taiwan, and China on July 31 for procuring technology for the Iran Aircraft Manufacturing Industrial Company (HESA).[23] HESA is a subsidiary of the Iranian Defense and Armed Forces Logistics Ministry and manufactures Ababil and Shahed-series drones.[24] Several of the sanctioned entities procured computer numerical control (CNC) machines for HESA. This equipment is used “to create precise and durable components for commercial and military aircraft,” according to the US Treasury Department.[25]
Iran is continuing to face severe water shortages. Director of the United Nations University Institute for Water, Environment, and Health Kaveh Madani told CNN on July 31 that Tehran Province could run out of water within weeks.[30] Iranian President Masoud Pezeshkian warned on July 31 that dams in Tehran will become empty by September or October if Iranians do not reduce water consumption.[31] The CEO of the Tehran Provincial Water and Wastewater Company said on July 17 that citizens in Tehran must reduce water consumption by 20 percent to “overcome” the water crisis, and that there was a seven percent decrease in consumption so far.[32]
The Iranian regime will likely not be able to meaningfully improve this water crisis if it does not address underlying issues, such as mismanagement and unsustainable development. President Pezeshkian met with regime officials, including Energy Minister Abbas Aliabadi and Interior Minister Eskandar Momeni, on July 31 to discuss potential solutions for the water shortages.[33] The Iranian government shut down municipal offices in Tehran on July 23 and is considering further shutdowns to conserve water resources.[34] Pezeshkian stated on July 30 that closures are not enough to solve Iran's water crisis and emphasized the importance of implementing sustainable development practices.[35] The head of the Iranian Environmental Protection Organization told state media on July 31 that the lack of sustainable water management practices caused the water crisis.”[36]
https://www.understandingwar.org/backgrounder/iran-update-august-1-2025