Energy Prospectus

US slaps new sanctions on Iran following strikes on US targets
PUBLISHED FRI, JAN 10 2020 10:49 AM ET

Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin announced Friday that the U.S. imposed new sanctions on Iran’s metal exports and eight senior Iranian officials.

The new penalties came days after Iran fired a barrage of missiles at Iraqi bases that were housing U.S. targets — a move made in retaliation for an American airstrike in Baghdad that killed Iran’s top military leader, Qasem Soleimani.

President Donald Trump said Wednesday that the U.S. will “immediately impose additional punishing economic sanctions on the Iranian regime” following the attacks on American targets in Iraq.

The Iranian officials targeted by the Treasury “have advanced the regime’s destabilizing objectives,” the department said in a press release. The officials include the secretary of Iran’s supreme national security council and the deputy chief of staff of Iranian armed forces.

“The United States is targeting senior Iranian officials for their involvement and complicity in Tuesday’s ballistic missile strikes,” Mnuchin said in the release.

Treasury also designated 17 Iranian metals producers and mining companies, along with entities based in China and the Seychelles, among other penalties.

The sanctions are the latest move in an aggressive tit-for-tat between Tehran and Washington that escalated sharply over the past few weeks.

Trump’s decision to kill Soleimani’s came after pro-Iran protesters stormed the compound of the U.S. embassy in Baghdad, which was itself borne of rage against a previous round of American strikes that killed members of an Iranian-backed militia.

Soleimani has been blamed for hundreds of American deaths, and the Pentagon claimed last week that the slain general was “actively developing plans to attack American diplomats and service members in Iraq and throughout the region.”

That “imminent” threat that Soleimani posed to Americans has been a key part of the administration’s justification for killing him. “days” before he was killed.

But Pompeo said this week that “we don’t know precisely when and we don’t know precisely where” Soleimani had planned to attack Americans next. He maintained, however, that Soleimani was plotting “a series” of imminent attacks.

“Those are completely consistent thoughts,” Pompeo told reporters at the White House on Friday after Mnuchin announced the new sanctions.

“This was gonna happen, and American lives were at risk,” Pompeo said.

The latest round of sanctions on Iran follows a string of attacks last summer in the Persian Gulf on oil tankers, the takedown of a U.S. surveillance drone and strikes on the world’s largest crude oil processing plant in Saudi Arabia.

At the White House on Friday, Mnuchin pushed back on concerns that the existing sanctions on Tehran were not working.

“The economic sanctions are working,” Mnuchin said Friday. “If we didn’t have these sanctions in place, literally Iran would have tens of billions of dollars. They would be using that for terrorist activities throughout the region.”

“There is no question that by cutting off the economics to the regime we are having an impact,” he added.

Continues:

“The United States will continue to counter the Iranian regime’s destructive and destabilizing behavior,” Trump said in a statement later. “Iran will never be allowed to have a nuclear weapon. These punishing economic sanctions will remain until the Iranian regime changes its behavior. The United States is ready to embrace peace with all who seek it.”

Last month, State Department officials said the pressure on Iran “will intensify in 2020, as the U.S. seeks to rein in Tehran’s pursuit of nuclear infrastructure and regional aggression.”

“There will be more sanctions to come, and Iran’s economic problems and challenges are going to compound in 2020,” a senior State Department official said on a Dec. 30 call with reporters.

“They are already deep into a recession, and we are also seeing Iran come under greater diplomatic isolation.”

Another senior State Department official added that the Trump administration has sanctioned approximately 1,000 individuals and entities with links to Iran’s malign activities.

“What we are doing is denying the regime the revenue that it needs to run an expansionist foreign policy, and by that policy, Iran has less money to spend today than it did almost three years ago when we came into office,” said the official, who spoke on the condition of anonymity.

In December, Secretary of State Mike Pompeo announced another round of fresh sanctions, this time targeting Iran’s largest shipping company and biggest airline, saying the companies are aiding the regime’s alleged proliferation of weapons of mass destruction.

“As long as its malign behaviors continue, so will our campaign of maximum pressure,” Pompeo said during a Dec. 11 press conference at the State Department.

The clash over Soleimani’s death demonstrates the latest example of the heightened tensions between Tehran and Washington since Trump’s withdrawal from the landmark Iran nuclear deal brokered by the Obama administration.

That 2015 agreement lifted sanctions that crippled Iran’s economy and cut its oil exports roughly in half. In exchange for sanctions relief, Iran accepted limits on its nuclear program and allowed international inspectors into its facilities.

In 2018, Trump unilaterally withdrew from the agreement and reintroduced sanctions on Tehran that had been previously lifted in accordance with the nuclear deal. In response, Iran stopped complying last May with some commitments in the 2015 nuclear deal.

On Sunday, Iran announced it would not abide by any limits established in the 2015 nuclear deal on the number of uranium enrichment centrifuges.

Therefore, Iran would have no limit on its enrichment capacity, the level to which uranium could be enriched, or Iran’s nuclear research and development. Iranian state-run broadcast said Tehran’s steps could be reversed if Washington lifted its sanctions.

MY TAKE: Tensions and conflicts between the U.S. and Iran will get much worse before Iran agrees to anything the U.S. wants.