US Moves to Further Increase Economic Pressure on Iranian Oil Trade
With the ceasefire talks stalled, the Trump administration continues to seek to use economic pressure to bring Iran to the negotiating table. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions, as it appears CENTCOM is also expanding the blockade on ships associated with Iran.
Treasury asserts that Iran continues to rely on front companies in permissive economic jurisdictions to obfuscate its role in oil sales and funnel the revenue to the regime. To that end, OFAC designated 12 individuals and entities on May 11 for their roles enabling the Islamic Revolutionary Guard Corps’ (IRGC) sale and shipment of Iranian oil to the People’s Republic of China.
“Economic Fury will continue to deprive the regime of funding for its weapons programs, terrorist proxies, and nuclear ambitions,” said Secretary of the Treasury Scott Bessent.
The Treasury Department reports it is maintaining maximum pressure on Iran and targeting the regime’s ability to generate, move, and repatriate funds. It says it has already disrupted billions in projected oil revenue, taken actions that have led to the freezing of nearly half a billion dollars in regime-linked cryptocurrency, and cracked down on Tehran’s shadow banking networks, before its latest moves to aggressively advance the program it calls Economic Fury.
The latest sanctions included individuals and companies based in Hong Kong and Dubai that OFAC reports coordinated payments and handled transactions on behalf of the IRGC. They said it included the sale and shipment of IRGC oil worth tens of millions of dollars and involved at least eight previously sanctioned tankers.
As the additional sanctions were being rolled out, reports were also coming from the Middle East that CENTCOM appears to have redirected a Greek-owned tanker carrying Iraqi oil to Vietnam. The tanker Agios Fanourios I, after gaining Iranian permission for the transit through the Strait of Hormuz, continues to sail in circles off Oman. It would represent an expansion of the blockade following similar sanctions the U.S. imposed against Iraqi networks that it said operate supporting Iran.
The blockade, however, appears to be working, as TankerTrackers.com reported today, “To our best knowledge, Iran hasn't successfully exported any crude oil by sea over the past 28 days…. In addition, Kharg Island hasn't loaded any tankers since May 6.”
Despite this, it still seems to be a war of wills. The Central Intelligence Agency reportedly told the White House, according to the Washington Post, that Iran has 75 percent of its pre-war inventories of mobile launchers and about 70 percent of its pre-war stockpiles of missiles. Iran, it also assessed, has managed to reopen its underground missile storage facilities.
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By the CIA’s estimates, Iran can likely withstand the naval blockade against it for three or four more months before facing severe economic hardship. For now, it appears content to pump crude into floating storage tankers and continue the propaganda war against the United States.
The latest moves by Treasury may be an effort to increase the economic pressure and hopefully shorten the window by which Iran can hold out.
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