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The US Treasury Department leveled sanctions across the entire Iranian oil sector Oct. 26, including the oil ministry, oil minister, state-owned oil company and shipping company.
Iran's oil exports are already under intense US sanctions pressure, but the move by the Trump administration one week ahead of the US presidential election was seen as an attempt to harden the policy in the event that a potential Biden White House strikes a new nuclear deal with Tehran and lifts the oil sanctions.
The Treasury designation names oil minister Bijan Zanganeh, the National Iranian Oil Co., National Iranian Tanker Co. and a swath of other officials and departments connected to the oil ministry. It also targeted an individual with UK ties and his UAE-based firm, Mobin International Ltd., for facilitating Iranian gasoline shipments to Venezuela's state-owned PDVSA, which is also under US sanctions.
Treasury Secretary Steven Mnuchin said in a statement that Iran's petroleum sector funds destabilizing activities of the Islamic Revolutionary Guard Corps-Qods Force, and that Tehran "continues to prioritize its support for terrorist entities and its nuclear program over the needs of the Iranian people."
Secretary of State Mike Pompeo said in a separate statement: "The few remaining buyers of Iranian crude oil should know that they are helping to fund Iran's malign activity across the Middle East, including its support for terrorism."
Zanganeh said on Twitter that the action would have no impact, as he holds no assets outside Iran to be subject to sanctions.
"Imposition of sanctions on me and my colleagues is a passive reaction to the failure of Washington's policy of reducing [Iran's] crude oil exports to zero," Zanganeh said. "The era of unilateralism is over in the world. Iran's oil industry will not be hamstrung."
Iran pumped 2 million b/d in September, according to the latest S&P Global Platts OPEC survey, down from 3.1 million b/d in September 2018, before the US reimposed oil sanctions on Tehran.
Iran sanctions relief under a change in US president represents the biggest supply and price impact for global oil markets heading into the US' Nov. 3 election, with analysts expecting a Biden White House to quickly return to the negotiating table with Tehran.
S&P Global Platts Analytics predicts 1.5 million b/d of Iranian exports could return to the market within a year of a new deal that removes US oil sanctions.