The United States imposes new round of sanctions on Iran’s oil industry

The United States has recently announced a fresh round of sanctions targeting Iran’s oil industry. This move comes as part of the ongoing efforts to bring Iran’s crude exports to zero and prevent the country from obtaining a nuclear weapon. The sanctions target more than 30 brokers, tanker operators, and shipping companies involved in selling and transporting Iranian petroleum.

Targeting Iran’s oil supply chain

Treasury Secretary Scott Bessent stated, “Iran continues to rely on a shadowy network of vessels, shippers, and brokers to facilitate its oil sales and fund its destabilizing activities.” The new sanctions aim to target all aspects of Iran’s oil supply chain and anyone dealing in Iranian oil exposes themselves to significant sanctions risk.

The sanctions specifically target oil brokers in the United Arab Emirates and Hong Kong, tanker operators and managers in India and China, as well as key Iranian entities such as the National Iranian Oil Company and the Iranian Oil Terminals Company.

Impact of the sanctions

Oil is a major source of revenue for Iran, and targeting its exports is intended to deny the government funds for its nuclear and missile programs. While previous sanctions under the Trump administration had driven Iran’s oil exports to near-zero levels, they rebounded under President Biden’s tenure as Iran found ways to evade sanctions.

Despite the sanctions, Tehran’s oil exports brought in billions of dollars in revenue. The International Energy Agency believes that other OPEC members, such as Saudi Arabia and the United Arab Emirates, have the capacity to make up for any lost exports from Iran.

Challenges and implications

China, a major buyer of Iranian oil, does not recognize U.S. sanctions and has established a trading system with Iran that circumvents the use of the dollar and U.S. regulators. It remains to be seen whether the new measures will significantly impact Iran’s oil exports.

Ultimately, the goal of the sanctions is to pressure Iran to change its behavior and comply with international norms. The United States is committed to using all available tools to address Iran’s destabilizing activities and ensure regional security.

Source: Reuters