On October 11, 2024, in response to the recent attack on Israel on October 1, 2024 – the second direct attack on Israel this year – the United States announced that it expanded sanctions on Iran’s petroleum and petrochemical sectors. A new determination was issued pursuant to Section 1(a)(i) of Executive Order 13902 to enable the Secretary of the Treasury, in consultation with the Secretary of State, to target persons determined to operate in the petroleum and petrochemical sectors in Iran, which broadens the range of activities involving Iran-origin petroleum and petrochemical products that are subject to U.S. sanctions. According to the Department of the Treasury, this action was taken to further limit the regime’s ability to earn critical energy-related revenues that have been used to undermine stability in the Middle East region and attack U.S. partners and allies.
In addition to the expansion of Iran sanctions, OFAC designated 10 entities and identified 17 vessels as blocked property for being members of a shadow fleet of tankers and illicit operators who are allegedly responsible for the shipment of a significant portion of Iran’s petroleum exports. According to OFAC, the designees supported petroleum shipments made on behalf of the National Iranian Oil Company (“NIOC”) and Triliance Petrochemical Co. Limited, two entities that have been sanctioned in the United States since 2020. The new designations were imposed pursuant to EO 13846 for knowingly engaging in the trade of Iranian petroleum and petroleum products. As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving the designated persons. Entities owned 50 percent or more by one or more blocked persons are also blocked.
On the same day, OFAC indicated that that the Department of State designated six additional entities and identified another six vessels as blocked property under EO 13846 for their involvement in the shipment of petroleum and petrochemical products for NIOC and Triliance.
According to OFAC, the United States took these actions in the spirit of the Stop Harboring Iranian Petroleum Act (“SHIP Act”), which authorizes the imposition of sanctions against foreign persons involved in the trade of Iran-origin petroleum and petroleum products. The functions of the SHIP Act were recently delegated by the President to the Departments of the Treasury and State in September 2024.
U.S. Department of Treasury Press Release | U.S. Department of State Press Statement | U.S. Department of State Fact Sheet | White House Memorandum