US sanctions arms sellers to Iran, Houthis as crude prices rise on Mideast tensions

As rising tensions in the Middle East boost crude oil futures, the US has imposed new sanctions targeting procurement of Chinese components for missiles and drones used by Iran and by Houthi rebels in Yemen.

"The United States will continue to disrupt Iran's ability to procure components essential to its ballistic missile and [drone] production, which Iran employs in its efforts to destabilize the Middle East and beyond, and impose costs on any intermediaries that support Iran in its proliferation activities," Matthew Miller, a spokesperson for the State Department, said in a July 31 statement.

Crude oil futures settled sharply higher July 31 amid concerns that the killing of Ismail Haniyeh, a top Hamas leader, in Iran would portend a fresh escalation in geopolitical tensions in the Middle East that could threaten supplies.

NYMEX September WTI settled $3.18 higher at $77.91/b and ICE September Brent climbed $2.09 to $80.72/b.

Haniyeh was killed in Tehran in a raid conducted by Israel, Hamas said July 31, raising worries about a wider regional conflict and dimming hopes for a ceasefire between Israel and Hamas. Haniyeh was in Iran to attend the inauguration of the country's new president Masoud Pezeshkian.

Israel has yet to confirm or deny its involvement on the killing of Haniyeh.

Reports of the attack in Tehran came on the heels of an Israeli airstrike in Lebanon July 30 that killed a senior leader of Hezbollah.

New sanctions

The US rolled out two batches of sanctions targeting weapons procurement for Iran and its proxies.

Treasury's Office of Foreign Assets Control sanctioned Al-Shaharai United Corp. a shipping firm that has facilitated shipments from China-based suppliers to the Houthis, according to a Treasury statement.

OFAC also designated Guangzhu Alshahari United Corp., the shipping firm's China-based branch, as well as Hongkong Alshahari United Corp., the parent company of the branch, and Ahmed Khaled Yahya Al-Shahare, the director of the branch.

Targeting operations within Yemen, OFAC sanctioned Maher Yahya Muhammad Mutahar al-Kinai, a businessman who has supported Houthi military procurement and smuggling, the statement said. Treasury also designated Yemen Telecommunication Asset Company for Information Technology, which has supported Houthi weapons and component procurement.

Turning to Iran, OFAC sanctioned five individuals and seven entities based in Iran, the China and Hong Kong.

"Those designated today procure various components, including accelerometers and gyroscopes, which serve as key inputs into Iran's ballistic missile and [UAV] program," Treasury said in a separate statement.

OFAC sanctioned Hong Kong and China-based companies Tas Technology Company, Cloud Element, Btw International, Bright Shore and Shenzhen Rion Technology Co. Treasury also sanctioned Iran-based companies Azmoon Pajohan Hesgar Liability Company and Buy Best Electric Pars Company.

And OFAC sanctioned the Iran-based individuals Sayyed Ali Seraj Hashemi, Saeed Hamidi Javar, Mohammad Abdollahi and Ezzatullah Ghasemian Sorbani, and Hong Kong-based Thomas Ho Ming Tong, according to Treasury.