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  • A man counts Iranian rials at a currency exchange shop, before the start of the U.S. sanctions on Tehran, in Basra, Iraq Nov. 3, 2018.

    A man counts Iranian rials at a currency exchange shop, before the start of the U.S. sanctions on Tehran, in Basra, Iraq Nov. 3, 2018. | Photo: Reuters

Published 5 November 2018

Trump's moves target Iran's main source of revenue, its oil exports, as well as its financial sector, essentially making 50 Iranian banks and their subsidiaries off-limits to foreign banks.

The United States Monday restored sanctions targeting Iran's oil, banking and transport sectors and threatened more action to stop its "outlaw" policies, steps the Islamic Republic called economic warfare and vowed to defy.

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The measures are part of a wider effort by U.S. President Donald Trump to curb Tehran's missile and nuclear programs and diminish the Islamic Republic's influence in the Middle East, notably its support for proxies in Syria, Yemen and Lebanon.

Trump's moves target Iran's main source of revenue, its oil exports, as well as its financial sector, essentially making 50 Iranian banks and their subsidiaries off-limits to foreign banks on pain of losing access to the U.S. financial system.

The return of the sanctions was triggered by Trump's May 8 decision to abandon the 2015 Iran nuclear deal, which was reached with five other world powers during Democratic President Barack Obama's administration. That agreement had removed many U.S. and other economic sanctions from Iran in return for Tehran's commitment to curtail its nuclear program.

In abandoning the agreement and imposing sanctions that it had lifted as well as adding new ones, the United States is betting the economic pressure will force Iran to change its behavior and agree to a new, much more restrictive deal.

"The Iranian regime has a choice: it can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble," U.S. Secretary of State Mike Pompeo told reporters. "We hope a new agreement with Iran is possible."

Speaking before Pompeo detailed the U.S. sanctions, Iranian President Hassan Rouhani accused the United States of targeting ordinary Iranians and said the Islamic Republic would find a way to "continue to sell our oil ... to break sanctions."

"The enemy is targeting our economy ... the main target of sanctions is our people," he said. "This is an economic war against Iran."

Iranian Foreign Minister Mohammad Javad Zarif said U.S. "bullying" was backfiring by making Washington more isolated, a reference to other world powers opposed to the initiative.

The sanctions are designed, in part, to force Iran's major customers to stop buying its oil. However, the United States gave temporary exceptions to eight importers - China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea - allowing them to keep buying from Iran.

The sanctions also cover 50 Iranian banks and subsidiaries, more than 200 persons and vessels in its shipping sector, Tehran's national airline, Iran Air, and more than 65 of its aircraft, a U.S. Treasury statement said.

European powers that continue to back the nuclear deal said they opposed the reapplication of sanctions and major oil buyer China said it regretted the move. 

The head of Iran's Central Bank, Abdolnassr Hemmati, said the country has taken necessary banking measures to continue trade with its partners after the U.S. move, Iranian state TV said.

The European Union, France, Germany and Britain said they regretted the U.S. decision and would seek to protect European companies doing legitimate business with Tehran.

Diplomats told Reuters last month that a new EU mechanism to facilitate payments for Iranian oil exports should be legally in place by Nov. 4 but not operational until early next year.

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