US Sanctions on Iranian Oil
As a result of Iran‘s recent attacks on the military sites in Israel, the United States issued new sanctions, focusing on companies and vessels that trade with or transport Iranian oil. More Financial Restrictions
The US Treasury Department and State Department issued the new sanctions jointly on Friday. This is in reaction to Iran’s missile barrage on 1 October, said Tehran, a retaliatory measure after the killings of senior officials such as Hamas leader Ismail Haniyeh, Hezbollah chief Hassan Nasrallah, and an Iranian general in Beirut. That attack has brought the stakes higher in an already volatile region.
Secretary of State Antony Blinken highlighted the sanctions as part of Washington’s strategy to hold Iran accountable for its actions of aggression. “In the wake of Iran’s unprecedented October 1 attack against Israel, the United States made clear that we would impose consequences on Iran for its actions,” Blinken said. He said that these steps are targeted at revenue streams Iran is accused of using to fund its nuclear program, missile development, and support of regional militant groups.
The latest sanctions expand the scope of US measures against Iran’s energy sector, focusing on oil and petrochemical industries Washington says are used to finance Iran’s ballistic missile and nuclear programs. Already strictly sanctioned are Iranian oil and petrochemical products, but the new moves aim to further restrict Tehran’s financial lifelines by hitting entities involved in the energy trade.
The State Department blacklisted six companies and six vessels on Friday, while the Treasury Department sanctioned another 17 ships, all registered in countries like the United Arab Emirates, China, and Panama. Assets based in the United States will be frozen and US entities prohibited from doing financial transactions with them.
At this juncture, when the country is getting ready to retaliate against the missile attacks, sanctions from Israel are coming. The Biden Administration has been warning that it wants Israel not to target Iranian oil facilities or nuclear sites in case of further escalation. However, Israeli officials said they had not even been discussing such strikes, despite an avid warning by President Biden.
There’s a chance of a military attack on Iran’s oil sector which threatens global oil prices. A suspension in crude oil exports from Iran would have implications for the market, and indications of an “energy war” that could cut the daily flow of oil by as much as 12 million barrels – about 10% of global output. It would naturally affect the entire global economy which means an increased price of fuels at some point, while at the same time generating political headaches for President Barack Obama in the United States.
The officials of Iran have described the missile attacks as a legitimate response to the targeted killings of their allies. Iran’s envoy to the United Nations, Amir Saeid Iravani said his country remains fully prepared to defend its sovereignty and territorial integrity against any form of aggression. He underscored that Iran’s actions were in direct response to what Tehran views as acts of provocation by Israel and its allies.
The sanctions have yet to do only the same to Iran but also warned international players in the business of Iranian oil. It has also made them plain to other nations and companies that might flirt with the idea of engaging with Tehran’s oil and petrochemical sectors.
In remarks, US Treasury Secretary Janet Yellen underscored that the latest sanctions target Iran’s attempts to use its energy revenues to fund its destabilizing activities, including the development of its nuclear capabilities and support for regional militant groups. “We will not hesitate to take further action to hold Iran accountable,” Yellen said.
Sanctions imposed by the US on the oil industry of Iran have been the most aggressive form reported recently. As many as 80 vessels are now sanctioned for their connection to Iranian oil this year. Claiborne Smith, from the monitoring group United Against Nuclear Iran, describes those targeted tankers as “notorious offenders” for carrying millions of barrels of oil meant for Iran.
The new round of US sanctions against Iran is the strongest action yet by the Obama administration to strangle Iran’s advances in the Middle East and its ability to finance the programs it wages controversy over. Though aimed basically at revenue stream cutoffs to Tehran, they also signal an unflinching commitment to Israel at a time when the region is so rattled. International observers also know that watching this play out in the changing Middle East geopolitical landscape threatens to draw broader consequences in terms of global stability as well as energy markets.
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