The United States has imposed sanctions on companies accused of involvement in Iran’s petrochemical industry. Specifically, these companies were alleged to be involved in the sale of hundreds of millions of dollars worth of Iranian petrochemical and chemical products to end-users in South and East Asia. The firms were not just Iranian, as the released statement said, as the firms being sacrificed were based in China, but also in India, Hong Kong, and even the United Arab Emirates.
The large Chinese sanctioned firms were Zhonggu Storage and Transportation Co. Ltd, which operates a commercial oil storage facility for Iranian crude oil, and a second firm, WS Shipping Co. Ltd, the manager of a ship that transported Iranian oil products.
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Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson said.
“The United States is committed to severely restricting Iran’s illicit oil and petrochemical sales. So long as Iran refuses a mutual return to full implementation of the Joint Comprehensive Plan of Action, the United States will continue to enforce its sanctions on the sale of Iranian petroleum and petrochemical products.”
The reason for the sanctions is mainly the nuclear deal
In the background, there is still an unresolved agreement over Iran’s nuclear program, so this move puts additional pressure on Iran.
The U.S. and Iran have already reached an agreement, and that was in 2015 when Iran’s uranium enrichment activities were curtailed. This has made it much harder for Iran to develop nuclear bombs, and in return, key international sanctions have been lifted.
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In 2018, however, US President Donald Trump withdrew from the deal, saying that the deal was not enough to curb Iran’s nuclear activities, ballistic missile program, and regional influence. Thus, sanctions were reimposed, partially paralyzing Iran’s economy.
US Secretary of State Antony Blinken also commented on the situation, saying.
“Anyone involved in such sales and transactions should stop immediately if they wish to avoid being subjected to U.S. sanctions. These enforcement actions will continue on a regular basis, with an aim to severely restrict Iran’s oil and petrochemical exports.”
This situation is not good for oil prices
The new nuclear deal with Iran has kept the oil market on tenterhooks for months. Indeed, if a final agreement between the countries had been reached, it could quite possibly have led to a fall in oil prices, as Iran, as a large producer, would have been able to export more oil more easily and thus increase supply on the market.
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However, with no deal in sight and with America imposing further sanctions, this move is more likely to push up the price of oil. At the same time, however, there are complaints in the US that gas prices are too high and something must be done about it.
US Energy Secretary Jennifer Granholm tweeted.
Today, I briefed @POTUS on the latest in the energy markets. Gas prices are now down $1.25 on average since June, but they should be at least 30¢ lower with current oil & wholesale gas prices.
Prices at the pump should be falling, not rising. Companies need to fix this. /thread
— Secretary Jennifer Granholm (@SecGranholm) September 28, 2022