In early July, the US State Department sanctioned six entities and identified four vessels as having "knowingly engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing" of Iranian petroleum products.

Among the sanctioned entities was a network of companies run by Iraqi businessman Salim Ahmed Said accused of having "profited from smuggling Iranian oil disguised as, or blended with, Iraqi oil".

On Friday, the director of Iraq's state oil marketing company SOMO denied any Iraqi role in such sanctions evasion.

"There are no smuggling or (petroleum) blending operations at Iraqi ports or in its territorial waters," Ali Nizar told the official INA press agency.

"It is totally false to speak of the existence of sites allowing the smuggling of Iraqi oil and mixture with oil from neighbouring countries."

On Tuesday, an AFP journalist, at the invitation of authorities, accompanied naval personnel on an operation to inspect the paperwork of oil vessels in territorial waters off southern Iraq.

Iran has denounced US sanctions on its oil sector, calling a subsequent round of restrictions in late July a "a malicious act aimed at undermining the economic development and welfare of the Iranian people".