In 2018, the country’s oil ministry gave the economic and engineering branch of the IRGC almost a dozen petrochemical and oil projects. These contracts totalled around $22 billion.
The U.S. Treasury Department explained that sanctions target the Persian Gulf Petrochemical Industries Company (PGPIC) and its holding group of 39 subsidiaries. The department made it very clear that it will not accept the financing of the recently designated Islamic Revolutionary Guard Corps (IRGC).
The Trump administration has made it so that U.S. companies are not allowed to deal with any Iranian companies, with only some rare exceptions. This means that the latest sanctions are applicable to companies outside the United States.
Iran is continuing to wreak havoc across the Middle East and, last month, tensions between Iran and the United States continued to mount. There were concerns that military conflict would ensue.
Washington has blamed Iran for being behind the recent attacks on a Saudi oil pipeline and on tankers off the coast of the United Arab Emirates (UAE). Iran has denied involvement in the attacks that took place a month ago, but the United States has no doubt about its involvement.
The sanctions on Iran are having a tremendous effect, especially the sanctions that are affecting Iran’s oil revenues – its biggest source of revenue. Every year, it plunders a significant portion of revenue on the financing of terrorism, terrorist activities and terrorist militias and proxy groups.
President Trump has explained on many occasions that his administration will not accept this behaviour and that it will work to counter its influence. Treasury Secretary Steven Mnuchin, regarding the sanctions announced last week, said: “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.”
The sanctions are having the intended effect because a number of militias and proxy groups across the region, most notably the Lebanese Hezbollah group, have seen major cuts to their funding. Reports indicate that the lack of funds from Iran has severely hampered Hezbollah’s activity, so much so that is has taken to the public to ask for donations so that it can continue to operate. Many fighters have been sent away so as to reduce the payroll bill and benefits have been cancelled.
The more sanctions that the regime faces, the harder it is going to be for the country’s economy to recover. The Iranian regime is in a very delicate situation and any small event is going to see it collapse. The country’s economy has been suffering for years and the regime has been unable to resolve the issues. There is no chance that it can turn the situation around now.
As long as the regime continues to be pressured, it will soon collapse and the country will finally have a chance to recover.