US Announces Additional Sanctions on Iran Ahead of Biden's Middle East Visit... Will Nuclear Deal Restoration Fail?

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The U.S. Department of the Treasury announced additional sanctions against Iran ahead of President Joe Biden's Middle East tour. This move is seen as a symbolic measure in response to demands from key Middle Eastern allies such as Saudi Arabia and Israel to strengthen a tough stance against Iran. As the biggest challenge in U.S. Middle East policy has shifted to securing increased oil production from Arab countries led by Saudi Arabia, concerns are rising that the restoration talks of the Iran nuclear deal may collapse.

On the 6th (local time), the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) stated in a press release that it had added 15 companies, organizations, and individuals to the list of additional Iran sanctions targets for assisting the export of hundreds of millions of dollars worth of oil and petrochemical products from Iran to East Asia. Brian Nelson, Deputy Assistant Secretary for Terrorism and Financial Intelligence at the Treasury, said in the statement, "While committed to reaching an agreement for mutual return to the JCPOA, we will continue to use all authorities to enforce sanctions on the sale of Iranian oil and petrochemical products."

The sanctions targets include shell companies linking Iranian oil with energy companies in East Asia such as China, as well as Iranian companies conducting transactions through these entities. Included among the sanctioned are JPC, an Iran-based petrochemical export company; Edger Commercial Solutions based in the United Arab Emirates (UAE); and Lustro Industrial, a Hong Kong-based company that acted as an agent for these transactions. Additionally, Oligei International Trade in Hong Kong, which remitted payments for transactions involving Treasury-sanctioned companies, and two Iranian nationals active in the UAE involved in Iranian crude oil exports were also sanctioned.

This action came shortly after indirect negotiations between the U.S. and Iran to restore the nuclear deal took place in Doha, Qatar, on the 3rd. Despite mediation by the European Union (EU), the talks ended after just one day without significant progress.

In particular, with the announcement of additional sanctions against Iran ahead of President Joe Biden's Middle East tour starting on the 13th, concerns are growing that the restoration talks of the Iran nuclear deal itself may collapse. The U.S. and Iran reportedly remain at odds over issues such as the removal of the designation of the Iranian Revolutionary Guard Corps as a terrorist organization and guarantees against the reimposition of sanctions.

From the Biden administration's perspective, which must secure increased oil production from Saudi Arabia and Arab League countries during this Middle East tour, it is expected that more emphasis will be placed on normalizing relations with Saudi Arabia rather than restoring the Iran nuclear deal. According to the Associated Press, Middle Eastern countries including Saudi Arabia are strongly demanding increased U.S. deterrence and military support against Iran, which is known to be backing various rebel and terrorist groups behind the scenes.

Meanwhile, the Iranian government expressed displeasure over the U.S.'s additional sanctions. According to CNN, the Iranian Revolutionary Guard Corps announced that it had arrested Giles Whitaker, the British Deputy Ambassador to Iran, and a Polish scientist on espionage charges. The Revolutionary Guard stated that Deputy Ambassador Whitaker and others were accused of entering a restricted military facility and collecting soil samples. However, it is reported that Deputy Ambassador Whitaker was deported after completing the investigation.