Iran's Military Supply Network Outlasts Sanctions

Iranian Vice President Mohammadreza Aref said Tehran’s defensive readiness had strengthened as a Reuters investigation documented more than 5,000 military-linked agencies importing billions of dollars in equipment, explosives and missile components despite Western sanctions and a U.S. naval blockade. The network kept operating under military pressure, financial restrictions and shipping controls. Aref called the Strait of Hormuz a source of fear for Iran’s enemies. “The Strait of Hormuz belongs to us, and the country’s strategies on this issue will become clearer.”

His remarks came as the United States and Israel renewed preparations for possible strikes and diplomats worked to prevent another escalation. The investigation doesn’t verify Aref’s claim that Iran’s readiness has improved, and it doesn’t establish the current strength of the country’s armed forces. It documents a procurement apparatus—and the limits of sanctions and maritime restrictions in disrupting it.

The procurement apparatus

The agencies Reuters identified have names beginning with MOD, referring to Iran’s Ministry of Defence. They share the Tehran address of the Ministry of Defence and Armed Forces Logistics. Some link to the Islamic Revolutionary Guard Corps and powerful business conglomerates known as bonyads. Official records list February 11, 1979, as their founding date, although most were established in 2013, when Iran already faced severe international sanctions.

One agency, MOD 346428, imported $2.3 billion in military-related goods during the 18 months ending June 2026, according to shipping records Reuters examined. Its purchases included detonators, explosives, aircraft engine components, precision machinery and rocket-fuel ingredients. In February, shortly before the war began, Iran imported 93 metric tonnes of titanium from China and hundreds of tonnes of chemicals that could go into rocket propellants and explosives.

The agency also imported 435 Iveco trucks between January 2025 and June 2026. Some resembled vehicles used as disguised mobile missile launchers, Reuters reported. Thousands of Toyota Hilux and Land Cruiser vehicles, along with Toyota Tundra trucks, also appeared among the purchases. Toyota said it didn’t conduct business in Iran and knew nothing about the transactions. Iveco said it had safeguards against sales to prohibited users but couldn’t control vehicles that third parties later resold.

Reuters cautioned that many imported materials and machines have civilian as well as military uses. The investigation couldn’t establish that every shipment was intended for weapons production.

Sanctions, war and supply routes

Reuters worked with Israeli-American risk consultancy 240 Analytics, examining Iranian banking records, corporate filings and approximately 19,000 import records. The investigation found that agencies bought equipment through overseas intermediaries and companies, as well as with proceeds from oil sales that bypassed sanctions. In 97 per cent of reviewed shipments, records showed transactions settled without currency transfers, allowing payments with funds held outside Iran. Reuters found no evidence that Western governments had individually sanctioned the numbered agencies identified in the documents.

Military-related supplies kept arriving after the U.S.-Israeli war began on February 28, despite attacks on weapons production facilities. Cargo vessels crossed the Caspian Sea from Russia; trucks travelled through Central Asia; freight aircraft arrived from China. Imports by the identified agency fell by 47 per cent to $54 million in March, then rose to $77 million by May. Reuters also identified five shipments of Russian detonators worth $7.6 million since January 2025, including a $1.9 million delivery in June 2026.

The limits of the pressure campaign

The report traces U.S. sanctions to 1979, followed by restrictions on banking, trade, investment and oil. The U.N. Security Council imposed nuclear-related restrictions in 2006, then tightened arms restrictions from 2007 to 2010. Iran agreed to limits on its nuclear program under the 2015-2016 deal in exchange for sanctions relief, which began in January 2016. President Donald Trump withdrew the United States from the agreement in 2018 and restored sweeping restrictions. In September 2025, Britain, France and Germany triggered the snapback mechanism, restoring earlier U.N. restrictions on nuclear and missile activities and arms trade.

The U.S.-Israeli conflict added military and maritime pressure, including a U.S. naval blockade, while some sanctions relief came under an interim agreement. Reuters said some customs records listed goods only by product codes and declared countries of origin, which couldn’t always be independently verified. The investigation documents Iran’s continued access to materials relevant to missile and drone production; it doesn’t show that sanctions, strikes or the blockade stopped the supply network. The Strait of Hormuz remains a major passage for global energy shipments, and the report leaves the practical reach of restrictions in question.