Washington — The US on Friday announced new sanctions against Iranian officials and the country's construction, manufacturing, textiles and mining sectors in response to Iranian strikes on US bases in Iraq on Tuesday.
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The sanctions, announced at the White House by US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, were included in an executive order which will include both primary and secondary sanctions, prohibiting trade with these sectors.
The move higher came after Iran launched missile attacks on US bases in Iraq in retaliation for last week's US drone strike in Baghdad that killed General Qassem Soleimani.
The US imposed primary and secondary sanctions on Iranian steel and iron manufacturers, the Liberia-flagged Hong Xun vessel, involved in the transfer of products, a network of three China- and Seychelles-based entities, and eight senior Iranian officials the US claims were involved in the attack, Mnuchin said.
"The president has been very clear: we will continue to apply economic sanctions until Iran stops its terrorist activities and commits that it will never have nuclear weapons," Mnuchin said.
"The goal of our campaign is to deny the regime the resources to conduct its destructive foreign policy," Pompeo said. "As long as Iran's outlaw ways continue, we will continue to impose sanctions."
Oil futures, which were range bound around even Friday morning, were little changed following the sanctions announcement. At 1622 GMT, ICE March Brent was up 6 cents at $65.43/b and NYMEX February WTI was down 19 cents at $59.37/b.
"The Trump administration sort of telegraphed that move over the past couple of days," OANDA senior market analyst Edward Moya said. "Right now markets expect extended political posturing between both adversaries, but are still not anticipating immediate military conflict."
Iranian oil flows have nosedived in the past year due to US sanctions crippling the country's oil export revenues.
Pompeo said Friday that ongoing sanctions have caused Iranian oil revenues to decline by 80%.
Iran's crude and condensate exports, which averaged more than 1.7 million b/d in March last year, slumped to around 500,000 b/d in the second-half of last year, according to Platts estimates.
Exports ranged between 400,000 b/d and 500,000 b/d in December, based on estimates compiled from shipping sources and cFlow, Platts trade flow software.
The country has had to resort to floating storage for its oil to cope with the surplus it has due to sanctions. Iran's oil tankers are holding almost 60 million barrels of oil at sea, the highest since more than three years.
Iran's production has fallen to its lowest level in more than three decades. Iran produced an average of 2.40 million b/d last year, down from 3.57 million b/d in 2018 and 3.79 million b/d in 2017, according to Platts OPEC survey data.