Iran Fuels Repression in Myanmar

Fuel shipments linked to Iran are helping Myanmar’s military regime to intensify air strikes on civilians trapped in the civil war that has raged since it seized power in a coup five years ago.

According to a January 26 report, Iranian shadow fleet tankers have been covertly delivering jet fuel to Myanmar’s military since at least October 2024. This has coincided with a sharp increase in aerial bombardments against civilian areas across the country. Using falsified locations, ship-to-ship transfers, and opaque ownership structures to cloak their illicit deliveries, these vessels enable Myanmar’s junta to sustain air operations while undermining Western sanctions against both Iran and Myanmar.

By expanding trade with Myanmar, the Islamic Republic of Iran is fueling a growing network of rogue regimes, including those committing genocide against Muslim minorities, as Myanmar did in 2017, when the Rohingya Muslim minority was targeted in what Biden Administration characterized as a genocide. What initially began as attacks targeting ethnic minorities and resistance groups has now devolved into a “scorched earth” campaign indiscriminately aimed at civilians, private property, and vital infrastructure. Schools, hospitals, religious sites, and refugee camps are regular targets of aerial and artillery strikes.

Iran’s Rhetoric and Its Reality

From October 2024 to December 2025, Iranian-linked shadow fleet tankers delivered nine shipments totaling approximately 175,000 tons of jet fuel for Myanmar’s military. Prior to that, Myanmar began purchasing Iranian weapons in 2022.

Such cooperation directly conflicts with Tehran’s 2017 public condemnation of the Rohingya Genocide, when Iran’s president declared that, “The international community has no excuse to allow the genocide of Rohingya Muslims to continue.”

By selling fuel through shadow networks, the Islamic Republic is profiting from the same military apparatus responsible for mass displacement and deaths of innocent Muslims. The Rohingya, who remain stateless and highly vulnerable, continue to endure starvation in government camps in Myanmar and increasing hardships at refugee camps in Bangladesh.

Running Low on Hard Currency, Myanmar Junta Distorts Economy To Fund Military

Myanmar’s reliance on Iranian fuel reflects its deeper economic weakness. The junta is running dangerously low on foreign exchange reserves which it needs to purchase weapons from China and Russia to sustain its domestic campaign. To conserve dollars, it has imposed strict capital controls, restricted bank withdrawals, and limited foreign currency access — measures that have devastated ordinary citizens and businesses.

At the same time, the regime continues to channel scarce hard currency toward military priorities. As it is unlikely that Iran or its intermediaries would accept Myanmar’s kyat currency, the junta is likely relying on opaque financial mechanisms, such as offshore accounts and foreign reserves, to purchase the fuel that sustains its air campaigns against civilians.

Sanctioning Change

Given the increasing economic ties between Yangon and Tehran, cutting off one will hurt the other.

Iran is on a precipice. In the face of economic instability and domestic unrest, the Trump administration’s “maximum pressure” campaign must target the fuel buyers supporting the Iranian regime to cut off its financial lifelines. The U.S. should actively monitor shipments of Iranian oil to Myanmar, sanctioning the financial institutions, shipping vessels, and ports facilitating the trade under the Iran sanctions program.

Previous sanctions against the Myanmar Foreign Trade Bank in 2023 significantly disrupted Myanmar’s financial networks. However, the junta has since shifted its finances to the state-owned Myanmar Economic Bank, effectively restoring access to foreign exchange. U.S. and allied policymakers should close this loophole by designating the Myanmar Economic Bank under the Myanmar (Burma) sanctions program. Doing so would restrict the junta’s ability to finance fuel imports and arms purchases from Iran, disrupt the shadow networks sustaining authoritarian rule, and effectively cut Iran off from an important source of revenue.

Dan Swift is a senior research analyst for economics, finance, and trade for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD), where Susan Soh is a research associate. For more analysis from the authors and FDD, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.