US Increases Sanctions on Iranian Oil and Tankers After Talks Are Rejected

Hours after reports surfaced that Iran's supreme leader Ayatollah Ali Khamenei was rejecting Donald Trump’s overtures for new talks, the U.S. Department of the Treasury announced a new round of sanctions targeting the oil industry and tankers. The move by the Office of Foreign Assets Control comes as the Trump administration has vowed a campaign of “maximum pressure” against Iran.

It was widely reported last week that Donald Trump had sent a letter via the United Arab Emirates to Khamenei seeking to start a new dialogue regarding Iran’s nuclear program. When asked by reporters, Trump last Friday only said “good things” are going to happen very soon. Today, however, Iranian media reports Khamenei dismissed the idea of negotiations referencing Trump’s decision during his first term to withdraw from the prior agreement.

“The Iranian regime continues to use the proceeds from the nation’s vast oil resources to advance its narrow, alarming self-interests at the expense of the Iranian people,” said Secretary of the Treasury Scott Bessent announcing today’s designations. “Treasury will fight and disrupt any attempts by the regime to fund its destabilizing activities and further its dangerous agenda.”

The U.S. asserts that Iran’s Ministry of Petroleum is allotting 20,000 barrels of crude oil per day to the military. Further, they said the allotment would be increased to over 500,000 barrels per day. The U.S. asserts that half of Iran’s oil revenues will be going to its armed forces by the end of 2025.

Today’s action designated Iran’s recently appointed Minister of Petroleum, Mohsen Paknejad, who assumed the role in August 2024. The U.S. said he is responsible for masterminding the oil operations and allotting the oil to the Iranian military to supplement its funding.

The U.S. also designated 13 additional tankers, including one registered in Iran and others registered internationally. The U.S. alleges the vessels are being used to transport oil from Iran or lift Iranian oil from storage in Dalian, China. Some of the oil is being transported to China or distributed to others in Asia. The tankers are said to be manipulating their AIS signals to disguise efforts to ship Iranian crude oil.

The vessels named include the Iran-flagged Polaris 1, as well as Peace Hill (Hong Kong), Seasky (San Marino), Corona Fun (Panama), Neso (Panama), Lexi (Cameroon), Itaugua (Cameroon), Lydya N (Palau), Blue Gulf (Palau), Shannon II (Barbados), Malili (Indonesia), Celebes (Indonesia), and Marina Vision (Indonesia).

The effort also targeted a range of companies including ones in China and India. It lists companies in Hong Kong, Singapore, Seychelles, Suriname, and Bangladesh that it says are facilitating the oil trades or operating the tankers.

Just weeks after returning to office, Trump announced the first round of sanctions on Iran targeting an additional 13 tankers. Since then, it has been reported in the media that the administration was looking at other ways of interrupting Iran’s oil trade, including possibly launching inspections on tankers at sea under regulations designed to stop the proliferation of weapons of mass destruction.

Last month, TankerTrackers.com highlighted that the U.S. so far has only sanctioned less than half of the tankers known to be involved in Iran’s oil trade. They calculated that over 500 tankers are working with Iran.