The United States is responding to Iran's October 1 missile attacks with new sanctions. Those adopted on Friday, October 11 target Iran's petrochemical and oil industries, as well as some 20 ships and several companies abroad, accused of facilitating transport, exports or production in these sectors.

"These measures will help deprive Iran of the financial resources used to support its missile programs and terrorist groups that threaten the United States, its allies and partners," Jake Sullivan, President Joe Biden's National Security Advisor, said in a statement. Tehran immediately described these sanctions as "illegal" and "unjustified."

The announcement comes as Israel considers a "deadly, precise and surprising" response to the October 1 attacks, in the words of Israeli Defense Minister Yoav Gallant. Washington is urging the Hebrew state not to attack Iranian oil or nuclear sites, for fear of escalation or global economic repercussions – Iran is still, as of 2023, the world's seventh-largest crude oil producer, according to the Energy Institute's rankings. According to Bloomberg, citing officials close to the matter, the US authorities have proposed imposing new economic sanctions instead.

Unlike the destruction of refineries, sanctions let oil through. That's the paradox of these measures. They do not prevent Iran from exporting its production to the rest of the world, notably via phantom fleets and multiple front companies, but they do complicate their task, increasing the pressure on the Tehran regime. Over time, they lose their effectiveness, as the targeted countries learn to circumvent them. Despite the American embargo in 2018, Iran has gradually resumed its oil exports, which has led to an increase in its crude production. This was back up to 3.4 million barrels a day in August, after falling to 2 million in 2020, according to the International Energy Agency.

Half of current production is exported, mainly to China, the world's largest importer of "black gold."

"The increase in Iranian oil production has benefited from tacit approval from the US administration, which saw it as a way of curbing rising crude prices, as well as support from China, the main buyer, which has systematically ignored Western sanctions," said the French Institute of Petroleum and New Energies in a note published on October 7.

Oil exports earned the regime $41 billion (€37 billion) in 2023, or around 41% of all its foreign earnings, according to data compiled by the Organization of the Petroleum Exporting Countries (OPEC) – of which Iran is a founding member. This windfall is now under scrutiny, as the Islamic Republic has just fired 200 ballistic missiles against Israel on October 1, after the 120 in the spring.It is exporting its drone know-how to Russia – notably the Shahed model – which is exploding by the hundreds in Ukrainian skies. Iran has managed to build up a ballistic arsenal in the shadow of international sanctions, which have been steadily tightened since 2006. Comprising dozens of types of rockets, ballistic and cruise missiles, with an estimated stockpile of several thousand units, it is one of the most diversified and extensive in the Middle East.

You have 33.89% of this article left to read. The rest is for subscribers only.