US slaps new sanctions on networks aiding Iran’s proxies in Middle East

• The US imposed new sanctions on firms and individuals aiding Hezbollah and Iranian proxies in Iraq, Lebanon, and Turkey to cut off Tehran's funding for war and weapons.
• The sanctions are part of "Operation Economic Outcast," aiming to isolate Iran economically and stop its support for terrorism and weapons development.
• The Treasury also settled with a US citizen for US$1.43 million over sanctions violations and warned that most Iran-related licence requests will be denied until Iran changes its behaviour.

WASHINGTON - The US government announced new sanctions on Sept 10 against firms and individuals that it says are aiding Hezbollah and other Iranian proxies in the Middle East as it intensified its campaign to isolate Iran economically.

The latest sanctions are part of the Treasury Department’s “Operation Economic Outcast,” first announced on Aug 24, which aim to cut off the revenues that Tehran is using to fund the war, build missiles, conduct cyberattacks and support the Islamic Revolutionary Guard Corps, or IRGC.

The Sept 10 actions by Treasury’s Office of Foreign Assets Control hit entities and individuals in Iraq, Lebanon and Turkey that Washington said supported Kata’ib Hezbollah, an Iraqi Shia paramilitary group under the command of the IRGC, and Hezbollah, a Lebanese Shia party, Treasury said in a statement.

Treasury also announced a settlement with a US citizen who agreed to pay US$1.43 million (S$1.8 million) to settle their potential civil liability for 39 apparent violations of sanctions on Iran, and issued a broad whistleblower appeal for tips on any sanctions evasion or money laundering by Iran.

OFAC also issued a bulletin making clear that it would deny most Iran-related licensing requests, except in exceptional circumstances, and said its licensing division had immediately begun denying “the vast majority” of outstanding Iran-related specific licence requests.

“OFAC will maintain this licensing policy until Iran changes its behaviour, including obstructing the Strait of Hormuz, attacking US personnel and partners in the Gulf, and pursuing nuclear and conventional weapons,” Treasury said.

“Operation Economic Outcast is targeting those who continue to stand with the failing Iranian regime,” Treasury Secretary Scott Bessent said in a statement.

“Whether they finance terror, launder money, or help Iran evade sanctions, we will find them, cut them off from the US financial system, and dismantle the networks keeping the regime afloat.”

The Iran war, now in its seventh month, has dragged down President Donald Trump’s approval rating as Americans grapple with far higher petrol prices, and could threaten his Republican Party’s chances of keeping control of Congress in midterm elections in November.

Far from the quick US military operation in Venezuela that ousted leader Nicolas Maduro, the Iran war has dragged into a battle of attrition punctuated by attacks on oil tankers that is also spreading to neighbouring countries.

The new sanctions did not target Iran-aligned Houthis, who seized control of Yemen’s port city of Mocha on Sept 10 ​and advanced down the Red Sea coast, gaining further leverage over the Bab el-Mandeb Strait, the southern outlet of the Red Sea and one of the world’s most important shipping routes.

Impact on oil

But a US official said Treasury’s campaign was hitting Iran’s economy hard while the US naval blockade was squeezing Tehran’s ability to move oil. Loadings of Iranian oil were down to about 0.2 million barrels per day over the past 30 days from 1.8 million barrels per day in January and February, they said.

Offloadings had dropped to 0.9 million barrels per day from 1.4 million barrels per day before the war, the official said.

The amount of Iranian or suspected Iranian oil on the water had averaged just 110 million barrels over the past week, down from over 180 million barrels in January and February.

Food prices increased sharply, the official said, while the Iranian rial depreciated by about 30 per cent versus the US dollar since the start of the war, the official added.

Brett Erickson, managing principal with Obsidian Risk Advisors, said the latest sanctions would have only a marginal impact on Iran’s ability to move hard currency.

“These in no way move the needle,” he said. “Beyond this, they target Hezbollah, but not the far more consequential Iranian proxy in the Houthis that are wreaking havoc on the global energy markets.” REUTERS