US, G7 leaders weigh new sanctions, other steps in wake of Iran’s attack on Israel

US President Joe Biden on Oct. 2 spoke with G7 leaders to coordinate new sanctions and other measures to respond to Iran’s recent attack on Israel, while the US Treasury Department issued a new round of sanctions on the Iran-backed Houthi rebels in Yemen.

“We can always look to identify new ways to impose sanctions on Iran or increase enforcement of our existing sanctions,” Matthew Miller, State Department spokesperson, said during an Oct. 2 press briefing. “Those are the measures we are looking at right now,” he said.

Miller suggested that some of the teeth of the effort could come from outside the US. “It is not just a question of US sanctions. It is a question of other entities, some of which don’t have as strong a sanctions regime as the US has imposed, taking their own measures as well,” he said.

A portion of Iran’s oil exports are effectively unsanctionable because some Chinese importers have little or no nexus to the US financial system, ClearView Energy Partners said in an Oct. 1 note. But more than 800,000 b/d potentially could be blocked by stepped-up enforcement actions, the note said.

A bipartisan group of US lawmakers in September urged the Biden administration to do everything it can to restrict Iran’s sale of oil to China, including using new sanction authorities included in the national security package that passed in April.

Iran’s crude output averaged 3.18 million b/d in August, according to the latest Platts OPEC+ survey by Commodity Insights. Trump’s 2018 “maximum pressure” sanctions campaign pushed Iranian crude output as low as 2 million b/d.

In addition to sanctions, some are calling for a response that includes attacks on Iran’s oil sector. “I would urge the Biden Administration to coordinate an overwhelming response with Israel, starting with Iran’s ability to refine oil,” Senator Lindsey Graham, Republican-South Carolina, said in an Oct. 1 statement.

Iran has a refining capacity of about 2.4 million b/d spread across 10 main sites.

Houthi sanctions

Treasury’s Office of Foreign Assets Control on Oct. 2 sanctioned one individual and three companies that have helped smuggle weapons for the Houthi rebels, according to a statement. OFAC also targeted one entity and two tankers linked to the transport of illicit Iranian oil.

The sanctioned tankers are the Gabon-flagged Izumo, and the Cook Islands-flagged Frunze, which have transported illicit Iranian oil and petroleum products, the statement said. OFAC also sanctioned Gemini Marine Limited, which owns, manages and operates the tankers, the statement said.

On the weapons smuggling front, OFAC targeted key procurement operatives and suppliers based in Iran and China that have helped the Houthi rebels deploy an arsenal of advanced missiles and drones against US and allied interests, the statement said.

OFAC sanctioned the companies Shenzhen Boyu Imports and Exports, Shenzhen Jinghon Electronics, and Shenzhen Rion Technology, the statement said. OFAC also targeted Iran-based operative Hasan Ahmad Hasan Muhammad al-Kuhlani, who has facilitated Houthi weapons smuggling, the statement said.
Source: Platts