US targets Iran’s ‘Ghost Fleet’ in latest sanctions over oil and missile links

The United States has expanded sanctions against Iran’s petroleum and petrochemical industries in response to an Iranian missile strike on Israel, the Biden administration announced on Friday.

These sanctions are part of an executive order aimed at restricting Iran’s access to funds that could support its nuclear and missile programmes.

National security adviser Jake Sullivan highlighted that the measures target the "Ghost Fleet," which transports Iran’s illicit oil globally. He stated that these sanctions are intended to further restrict Iran's financial resources, which are used to support missile development and terrorist organisations that pose threats to the US, its allies, and partners.

This action follows Israel's vow to retaliate against Iran’s October 1 missile attack, which came after Israeli airstrikes in Lebanon and Gaza and the assassination of a Hamas leader in Iran.

The US Treasury now has the authority to impose sanctions on individuals involved in Iran's petroleum and petrochemical sectors.

Although President Biden has urged Israel to seek alternatives to targeting Iran’s oil infrastructure, Gulf states are lobbying Washington to prevent any such attacks. They fear Tehran’s proxies could retaliate against their oil facilities if tensions escalate.

Treasury Department has also designated 16 entities and identified 17 vessels connected to the illicit trade of Iranian petroleum, which supports Iran’s oil sector.

Meanwhile, the State Department has imposed sanctions on six additional entities involved in Iran’s petroleum trade and designated six ships as blocked assets.

Despite these sanctions, Iran’s oil exports have increased during Biden’s administration, largely due to sanctions evasion and increased sales to China, which is now Iran’s largest oil buyer.

The Eurasia Group, a risk consultancy, suggested that the US could reduce Iran’s oil exports through stricter enforcement of existing sanctions, potentially using satellite surveillance to monitor ships that disable their transponders.

This would likely require diplomatic efforts, particularly with countries like Malaysia and the UAE, who may be hesitant to support measures seen as favouring Israel.