Sweeping US sanctions on Iran target leaders, oil and trade

PARIS: Ongoing US sanctions on Iran target Supreme Leader Ayatollah Ali Khamenei and the Islamic republic’s top brass, while also seeking to choke trade in a variety of goods from oil to carpets.

US President Donald Trump on Wednesday promised details of new sanctions within 48 hours in response to a missile or drone attack on Saudi oil facilities that Riyadh has blamed on Iran.

New sanctions imposed in June are built on a series of previous ones.

In addition to Khamenei, the sanctions target eight senior commanders of the Islamic Revolutionary Guards Corps (IRGC).

The United States also blacklisted Iranian Foreign Minister Mohammad Javad Zarif, whose US assets were frozen on Aug 1.

Last November, six months after Trump withdrew from the nuclear deal with Iran, the United States took aim at its oil exports and financial transactions.

Specific actions targeted Iran’s banking, shipping and energy sectors, threatening penalties against companies, even those of US allies in Europe and elsewhere, that do business in them.

In May, in a bid to further choke off oil exports, Iran’s top foreign exchange earner, the United States lifted exemptions granted to eight countries, including Turkey and India, allowing them to purchase Iranian oil.

As a result, exports fell from two million barrels a day in early 2018 to 400,000 in July this year.

Punitive measures

The sanctions last year brought back punitive measures that were imposed and then lifted by former president Barack Obama, who reached an international agreement under which Iran moved to end its nuclear programme.

On August 7, 2018, the first sanctions lifted under the 2015 nuclear deal came into force, banning:

  • The Iranian government’s purchases of dollars, or the international buying and selling of significant sums of rials, Iran’s currency under pressure
  • Purchases of Iranian treasury bonds
  • Trade in gold or other precious metals, aluminium, steel, carbon or graphite
  • Automobile and commercial aviation trade
  • US imports of Iranian carpets or foodstuffs

Under the sanctions, any foreign institution that does business with Iran’s central bank or other banks in the country loses access to the US financial system.

The risks for foreign banks are high in a globalised economy in which the dollar remains the dominant currency.

The United States has also sought to cut off Iranian access to SWIFT, the international system of interbank transfers.