The United States has expanded its sanctions on Iran's petroleum and petrochemical sectors in response to an attack on Israel by Iran on October 1. This marks the second direct attack on Israel by Iran this year. The expansion of sanctions aims to increase financial pressure on Iran, limiting its ability to earn energy revenues that could be used for destabilizing activities in the region.
The Secretary of the Treasury, with consultation from the Secretary of State, has identified these sectors under section 1(a)(i) of Executive Order (E.O.) 13902. This order allows for targeting a wider range of activities related to Iran's trade in petroleum and petrochemical products. According to E.O. 13902, sanctions can be imposed on individuals operating within these sectors of the Iranian economy.
In addition, the Office of Foreign Assets Control (OFAC) is designating ten entities across various jurisdictions and identifying seventeen vessels as blocked property under E.O. 13846. These actions are due to their involvement in shipments supporting the National Iranian Oil Company (NIOC) and Triliance Petrochemical Co. Limited, both designated by U.S. authorities.
Secretary of the Treasury Janet L. Yellen stated, "In response to Iran’s attack on Israel, the United States is taking decisive action to further disrupt the Iranian regime’s ability to fund and carry out its destabilizing activity."
The U.S.'s actions align with the Stop Harboring Iranian Petroleum Act (SHIP Act), part of the Emergency Supplemental Appropriations for Fiscal Year 2024, which imposes sanctions against those involved in trading Iranian petroleum.
Iran's oil exports are facilitated by a network known as its "ghost fleet," which employs deceptive practices to transport oil primarily to Asian markets. Several companies and vessels have been identified for their roles in this network and are now subject to U.S. sanctions.
The U.S. Department of State has also taken action against several entities involved in moving Iranian petroleum illicitly.
These measures result in all properties or interests belonging to these targets being blocked if they fall under U.S jurisdiction or control. Furthermore, any foreign financial institution knowingly facilitating significant transactions for these designated individuals or entities may face U.S sanctions.
OFAC emphasizes that while it possesses authority to designate individuals and entities for sanctions, it also considers removing them from sanction lists when appropriate changes occur.
