WASHINGTON DC: The United States is reimposing punitive measures targeting the Iranian oil and financial sectors in what US Secretary of State Mike Pompeo called “the toughest sanctions ever placed” against Iran.
Taking effect Monday, the measures are the most concrete result yet of US President Donald Trump’s controversial decision in May to abandon the multi-nation nuclear deal with Tehran.
They will directly affect companies from third countries doing business with Iran. They could upset world oil markets, though the US has granted temporary waivers to eight jurisdictions to continue importing Iranian oil.
Iran’s supreme leader Ayatollah Ali Khamenei denounced the measures on Saturday, saying Trump had ‘disgraced’ US prestige and would be the ultimate loser in the long-running quarrel between the countries.
The US side was unmoved.
“Sanctions from the United States will be reimposed at midnight tonight,” Pompeo told CBS‘s “Face the Nation.” He said what he called “the terror regime” in Tehran must change its ways.
World oil markets were on alert, nervously set to gauge the consequences of the sanctions.
“All eyes will be on Iranian exports, whether there will be some cheating around US sanctions, and on how quickly production will fall,” said Riccardo Fabiani, an analyst for Energy Aspects.
Oil is Iran’s main source of income. But the sword has two edges: Iran is also the OPEC cartel’s third-largest producer.
The US stance has already inflicted serious pain on Iranians, with the country’s currency, the rial, losing more than two thirds of its value since May.
Iranian oil exports have fallen by about a million barrels a day in that time, though India and China have continued to purchase it. Most Europeans, as well as Japan and South Korea, have stopped.