The Treasury Department slapped fresh sanctions on the Iranian oil sector on Tuesday as President Donald Trump is eyeing a potential nuclear deal with the Islamic Republic.
The Treasury’s Office of Foreign Assets Control (OFAC) is placing sanctions on approximately two dozen entities involved in Iran’s illegal international oil trade in line with the Trump administration’s “maximum pressure” campaign against the Iranian regime, the Treasury Department announced. The new sanctions are meant to crack down on Iran’s capacity to use oil proceeds to fund terrorism across the Middle East, and they are being imposed as the Trump administration is working to find a diplomatic solution to the threat posed by the Iranian nuclear program.
“Today’s action underscores our continued focus on intensifying pressure on every aspect of Iran’s oil trade, which the regime uses to fund its dangerous and destabilizing activities,” Treasury Secretary Scott Bessent said in a statement. “The United States will continue targeting this primary source of revenue, so long as the regime continues its support for terrorism and proliferation of deadly weapons.”
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The Treasury Department accused Sepehr Energy — the parent company of several Iranian oil companies — of working with several Chinese and Hong Kong-based companies to obscure the origins of Iranian oil being shipped to China and other buyers. The Trump administration alleges that Sepehr Energy is the affiliate of the Iranian Armed Forces General Staff, and that the company uses a complex network of “shadow” tankers and front companies to dodge existing sanctions and generate cash for the Iranian regime.
The Trump administration is hoping to create a deal with Iran that keeps the country’s nuclear program — feared by some analysts to be approaching the capacity to produce nuclear weapons — in check, though it appears that such a deal is not yet close to being reached. In remarks delivered in Saudi Arabia on Tuesday, Trump made clear that he will come down hard on the Iranian economy if the regime does not quickly engage with the U.S. and choose to pursue a “more hopeful future.”
“I want to make a deal with Iran. If I can make a deal with Iran, I’ll be very happy if we’re going to make your region and the world a safer place,” Trump said during the speech. “But if Iran’s leadership rejects this olive branch and continues to attack their neighbors, then we will have no choice but to inflict massive maximum pressure [and] drive Iranian oil exports to zero like I did before.”
As Trump alluded to, the first Trump administration aggressively sanctioned the Iranian oil sector after pulling out of the Obama administration’s Iran nuclear deal, depriving the Iranian economy of proceeds from its most important sector. The Biden administration subsequently neglected to consistently enforce existing sanctions on Iran, allowing the regime to line its coffers with cash likely used to sponsor terrorism across the Middle East as it illicitly sold oil to buyers like China for years.
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