United States expands sanctions against Iran's oil fleet and automotive sector

The United States Department of the Treasury has intensified economic pressure on Iran through new sanctions targeting both the energy and automotive sectors. In a recent move, the Treasury sanctioned 17 oil tankers and their associated networks, which officials claim are part of Iran’s ‘shadow fleet’ used to transport crude oil, petroleum products, and petrochemicals. U.S. Treasury Secretary Scott Bessent stated the goal is to cut off financial resources used for military and cyber activities.

Simultaneously, the Office of Foreign Assets Control (OFAC) has issued warnings to foreign banks regarding the Iranian automotive industry. These warnings extend the scope of sanctions from physical parts to the financial channels used for payments. This shift poses a significant risk to the steel industry, as disruptions in automotive production and the inability to use international banking services may reduce demand for steel products like hot and cold rolled sheets and galvanized steel.

While the tanker sanctions aim to neutralize much of the shadow fleet, officials note that approximately 20 million barrels of Iranian crude remain on vessels outside the immediate scope of these measures, located near Singapore, Malaysia, and China.