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The U.S. Treasury Department said al-Bahadly used his government position to support networks connected to Iranian oil smuggling operations.
Washington also announced sanctions against leaders of Iran-backed armed groups in Iraq, including Kata’ib Sayyid al-Shuhada (KSS) and Asa’ib Ahl al-Haq (AAH).
US officials accused the groups of supporting attacks against American personnel and helping Iran increase its influence in the region.
Treasury Secretary Scott Bessent said the US would continue putting economic pressure on Iran and anyone helping Tehran avoid sanctions.
The sanctions come as tensions between Iran and the United States remain high following months of conflict and instability in the Middle East.
The move also comes during political negotiations in Iraq, where reports suggested al-Bahadly could become a candidate for a higher government position.
Meanwhile, global attention remains focused on the Strait of Hormuz, where tensions continue affecting oil markets and international shipping routes.