US reimposes ‘maximum pressure’ sanctions on Iran
Trump signs executive order reinstating a hardline sanctions campaign against Iran ‘aimed at driving Iran’s oil exports to zero’
Iran’s maximum pressure 2.0 sanctions policy will require shipping, insurance, and port operators to adhere to new guidance and promises a crackdown on illicit transhipment
US President Donald Trump has restored his “maximum pressure” sanctions campaign on Iran, pledging to drive the Islamic state’s oil exports “down to zero” including exports of Iranian crude to China.
Trump signed the presidential memorandum on Tuesday evening, reimposing the hardline policy on Iran that was introduced during his first term, promising a string of direct actions from the US Treasury to follow.
The order requires the Treasury to issue updated guidance to all relevant business sectors including shipping, insurance, and port operators, about the risks to “any person that knowingly violates US sanctions with respect to Iran or an Iranian terror proxy”.
It also promises to re-evaluate beneficial ownership thresholds to ensure sanctions deny Iran all possible illicit revenue, and evaluate whether financial institutions should adopt a “Know Your Customer’s Customer” standard for Iran-related transactions to further prevent sanctions evasion.
While the details are yet to emerge from within the treasury, the order makes clear that the US will be stepping up direct actions against Iranian shipping and the order specifically directs the US attorney general to “pursue all available legal steps to impound illicit Iranian oil cargoes”.
Whether that will ultimately translate into a new secondary sanctions is not yet clear. Secondary sanctions effectively force countries to choose between doing business with those imposing sanctions or those that are the subject of sanctions.
President Obama’s administration leveraged secondary sanctions to bring Iran to the negotiating table to form the Joint Comprehensive Plan of Action (JCPOA) in 2015, a deal that Trump ultimately abandoned in 2018.
The new order also includes a crackdown on illicit transhipment of Iranian oil, specifically calling out Iraq as a target along with other unspecified “Gulf countries”.
The order requires the US secretary of state to ensure that the Iraqi financial system “is not utilized by Iran for sanctions evasion or circumvention, and that Gulf countries are not used as sanctions evasion transhipment points”.
The new executive order immediately removes any remaining waivers on Iran including those related to Iran’s Chabahar port project being developed with India.
India last May signed a 10-year agreement with Iran to develop and operate the Shahid Beheshti terminal of Iran’s strategic Chabahar port. That agreement followed a previously promised Indian investment in 2016 of a potential $500m and comes after multiple failures to fully implement previous deals.
That the new US presidential order directly calls out the projects suggests that further delays are now inevitable.
Trump has accused former president Joe Biden of failing to rigorously enforce oil-export sanctions and now has the option to use the 2024 Stop Harboring Iranian Petroleum (SHIP) law to curtail some Iranian barrels.
While Washington increasingly tightened the noose around Iran’s commodity exports last year, and especially after October, Iran’s exports rose almost 11% year on year in 2024 — the highest rate of export in any year since the reimposition of sanctions in 2018 under the first Trump administration.
According to UANI, Iran exported 587m barrels of crude and condensate last year, an increase of 10.7% year on year. That equates to an average of about 1.6m barrels per day.
The record pace comes despite the US blocking over 21m dwt in 2024, with over half of those designations coming since October. However, the growth of Iran’s fleet has allowed it to keep shipping out barrels at record pace.