The US is imposing sanctions targeting Iranian oil exports. This is part of a wider campaign to slowly increase pressure on Iran as the new Trump administration seeks to return to some aspects of the “maximum pressure” campaign from the first Trump administration.
The US Department of State said on February 24 that it is “designating 16 entities and vessels for their involvement in Iran’s petroleum and petrochemical industry.”
Among the targets are eight “entities” based in Iran, India, Malaysia, the Seychelles, and the UAE. They are involved in the sale, purchase, and transportation of Iranian petroleum. In addition, eight vessels were identified as part of this network. Both the US Department of Treasury and State put out statements about this new initiative.
The Department of State and the Department of the Treasury’s Office of Foreign Assets Control (OFAC) said they are “concurrently sanctioning a combined total of 22 persons and identifying 13 vessels as blocked property, across multiple jurisdictions, for their involvement in Iran’s oil industry.”
The sanctions affect not only the entities but also the oil tankers and dozens of people, according to the Associated Press. According to that report the sanctions are aimed at getting to a deal. The new Trump administration doesn’t want to go as hard on Iran as the first time, it prefers some kind of accomidation. Absent that, it will increase pressure.
However, Trump has distanced himself from some of the Iran “hawks” of the first administration, such as John Bolton. “We will see whether or not we can arrange or work out a deal with Iran,” Trump has said.
“We don’t want to be tough on Iran. We don’t want to be tough on anybody…But they just can’t have a nuclear bomb.”
Targeting aspects of Iran’s oil supply chain
US Treasury Secretary Scott Bessent has indicated that the US will use these sanctions to target aspects of Iran’s oil supply chain. The key parts of this supply chain include oil brokers in places such as the UAE and Hong Kong as well as oil tanker operators and managers who are located in China and India.
The head of Iran’s National Iranian Oil Company and the Iranian Oil Terminals Company were also targeted. The statement at Treasury noted that “the vessels sanctioned today are responsible for shipping tens of millions of barrels of crude oil valued in the hundreds of millions of dollars.”
The report noted that US President Donald Trump had issued National Security Presidential Memorandum 2 on February 4, 2025, ordering a campaign of maximum pressure on Iran and to reduce Iran’s oil exports to zero.
The target of these sanctions illustrates the complexity of using sanctions to deal with Iran’s oil trade. There are many entities involved, and they span the globe. They are also located in countries that are friends and partners of the US, such as India or the UAE. Many countries are not on board with confronting Iran. They want accommodation.
Iran and Saudi Arabia, for instance, reconciled over the last several years. A lot has changed in the Middle East since the Iran deal a decade ago. In addition, Iran has grown closer to Russia and China. Iran is also now seeking to play a larger role in BRICS and the SCO, which are economic blocs that are not part of the West.
One of the sanctions targeted the chief executive officer of the National Iranian Oil Company (NIOC). The Treasury statement says that “NIOC plays a key role in underwriting the regionally destabilizing activities of Iran’s military and its proxy groups, including the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).
The Iranian government allocates billions of dollars worth of oil each year to its armed forces to supplement their annual budget allocations.”
Sanctions also went after a subsidiary that “oversees all operations at Iran’s oil terminals, including Kharg Island Oil Terminal, through which a majority of Iranian oil flows, and South Pars Condensate Terminal, which accounts for 100 percent of Iran’s gas condensate exports.”
The report says that Iran also exports oil from terminals on the Caspian Sea. Iran is increasingly seeking to expand its north-south economic corridor and recently held a confab aimed at increasing economic ties across the Caspian.
Another challenge is finding the oil brokers who help Iran export oil. The US Treasury statement singled out a network that extends to the UAE and China. “UAE-based Petroquimico FZE has purchased tens of millions of dollars’ worth of petroleum products from NIOC,” the report says.
It uses a Barbados-flagged ship called the Casinova, also called Ying Ge, “owned, managed, and operated by Liberia-based Le Monde Marine Services Limited, to transport over 200,000 barrels of Iranian oil to the UAE. “ Recently, the ship was in the Straits of Hormuz.
Another company that was targeted is Petronix Energy Trading Limited, which is said to use the Panamanian-flagged Meng Zin ship and a ship called Phoenix. Meng Xin appears to have been near Kuwait recently. The Treasury statement also notes there is a “shadow fleet” used for oil shipments.
This includes a claim that in “September 2024, the Panama-flagged URGANE I, managed and operated by PRC-based Nycity Shipmanagement Co Ltd (Nycity Shipmanagement), loaded Iranian Pars crude oil via a ship-to-ship transfer with a tanker owned by the sanctioned National Iranian Tanker Company.”
A number of other vessels were identified as part of this network. “As a result of today’s action, all property and interests in property of the designated person(s) described above that are in the United States or in the possession or control of US persons is/are blocked and must be reported to OFAC,” the report said.
The State Department said that “today’s action represents an initial step to realize President Trump’s campaign of maximum pressure on the Iranian regime. It disrupts efforts by Iran to amass oil revenues to fund terrorists’ activities.”
The challenge of these sanctions is clear. Numerous entities are involved, and they operate a network of ships across the Indian Ocean. Iran has become an expert at avoiding sanctions over the years.
The world of shipping is also already murky, with numerous companies and ships flagged in various countries. Nothing in the world of shipping is ever simple and clear-cut. Iran exploits this to its benefit.
It finds ways to transfer oil. Ships can turn off transponders and conduct ship-to-ship transfers to avoid detection. It’s notoriously hard to prevent this kind of trade.
In addition, the recent attempt by the Houthis to prevent shipping via the Red Sea illustrated the new world order on the high seas. The Houthis did not target ships linked to Russia or China, but targeted commercial ships it said were linked to Israel or linked to western companies and countries that work with Israel.
The Houthis sometimes made mistakes regarding which ships they targeted. It was difficult to prevent their attacks, and the attacks only stopped when a ceasefire began in Gaza.
The fact is that it is difficult to deal with Iran’s oil exports and sanctions will only be able to do so much in this regard.
This article was originally published at www.jpost.com
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