The U.S. Treasury Department has announced sanctions against Iran's Persian Gulf Petrochemical Industries Company (PGPIC) as part of a series of moves to pressure Tehran to negotiate a new agreement to restrict its nuclear and ballistic-missile programs.
The sanctions announced on June 7 hit PGPIC and 39 subsidiaries and foreign-sales agents. The company accounts for 40 percent of Iran's petrochemical-production capacity and 50 percent of its petrochemical exports.
Iran said the move proved U.S. President Donald Trump is not serious about negotiating.
The Treasury Department statement said PGPIC was providing financial support for a company controlled by the Islamic Revolutionary Guards Corps (IRGC), which was previously designated a "foreign terrorist organization."
It said Iran's Oil Ministry in 2018 awarded Khatam al-Anbiya, the IRGC's economic and engineering arm, 10 projects in the oil and petrochemical industries worth $22 billion, four times the official budget of the IRGC.
"This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC," Treasury Secretary Steven Mnuchin said in a statement.
A senior official in the U.S. administration told Reuters that this action “would continue to have a very chilling effect on the prospects for any future recovery for the Iranian economy."
The petroleum and petrochemical industries "have been serving for the last 40 years as a kind of institutionalized slush fund for the IRGC," the official said.
However, several analysts said the sanctions’ effect will be moderated somewhat because non-U.S. companies already have begun to avoid doing business with Iran's petrochemicals sector because of existing sanctions.
An Iranian Foreign Ministry spokesman slammed the latest U.S. action.
"Only one week was needed for the U.S. president's claim that he was ready to negotiate with Iran to be proven hollow," Foreign Ministry spokesman Abbas Mousavi said on June 8.
Mousavi called the new sanctions another instance of "economic terrorism" and a continuation of U.S. "enmity" against Iran.
In 2018, the Trump administration withdrew from a 2015 deal between Tehran and leading international powers that imposed restrictions on its nuclear program in exchange for sanctions relief.
Trump has said that deal was "fatally flawed" because it did not address Iran's ballistic-missile program or Tehran's alleged state sponsorship of terrorism.
Amid rising tensions, Washington in May announced the deployment of an aircraft carrier battle group and a bomber task force to the Persian Gulf to counter what U.S. officials called "clear indications" of threats from Iran to U.S. interests or its allies.