Sanctions on Iran's petroleum industry aim to curb IRGC

Recent US sanctions on entities that purchase petroleum products from Iran will further weaken the Iranian regime and constrict the activities of the Islamic Revolutionary Guard Corps (IRGC) and its proxies, experts told Al-Mashareq.

"Instead of using its natural resource wealth to improve living conditions for the Iranian people, the Iranian regime prefers to pawn its oil to fund the IRGC's Quds Force," US Secretary of State Mike Pompeo said on October 26th.

"We will not let that happen," he added.

On October 29th, the US Department of State, Department of the Treasury and Department of Justice took actions to curb Iran's oil and petrochemical sales.

The Justice Department announced it had filed a complaint to seek the forfeiture of two shipments of Iranian missiles the US Navy seized in transit from the IRGC to militant groups in Yemen.

It said it had sold approximately 1.1 million barrels of Iranian petroleum seized from four foreign-flagged oil tankers bound for Venezuela, with a percentage of the proceeds going to the US fund for victims of state-sponsored terrorism.

These actions represent the US government's largest-ever forfeiture actions for fuel and weapons shipments from Iran.

Meanwhile the State Department imposed sanctions on Arya Sasol Polymer Company, Binrin Limited, Bakhtar Commercial Company, Kavian Petrochemical Company, and Strait Shipbrokers PTE Ltd.

These entities based in Iran, China and Singapore, "have knowingly engaged in a significant transaction for the purchase, acquisition, sale, transport or marketing of petroleum products from Iran", the State Department said.

Also designated were the following individuals, occupying leadership positions in the sanctioned companies: Amir Hossein Bahreini, Lin Na Wei, Murtuza Mustafamunir Basrai, Hosein Firouzi Arani, and Ramezan Oladi.

Separately, the Treasury designated eight entities "for their involvement in the sale and purchase of Iranian petrochemical products brokered by Triliance Petrochemical Co. Ltd.".

The Treasury sanctioned Triliance in January of this year.

Crippling IRGC smuggling

Despite regional tensions, "the Iranian regime continues to quash any hope of a path leading to dialogue and away from the rhetoric of war", said Abdullah al-Dakhil, a lecturer at King Saud University's faculty of political science.

"It is using the country's natural resources, that by right belong to the Iranian people, for the benefit of its proxies in the region," he told Al-Mashareq.

Going after the shipments of the IRGC or its affiliates is a "legitimate action, because the Iranian regime has become a broad regional and global threat", he said.

The sanctioning of companies that facilitate sale and transport operations for the IRGC will ultimately lead to the dissolution of this network, al-Dakhil said.

This will cripple the IRGC's efforts and capabilities to the point that it will no longer be able to smuggle anything from Iran to other countries, he said.

The IRGC's regional proxies, including the Houthis (Ansarallah) in Yemen, also will suffer from the disruption of the smuggling networks, he said.

"All these funds that are being confiscated because of their misuse by the IRGC rightfully belong to the Iranian people and were stolen by the IRGC and affiliated institutions under false religious, sectarian and political slogans," he added.

IRGC's support to the Houthis

"If it were not for the IRGC's continued support of the Houthis, the Yemeni people would have been rid of the ordeals, calamities and wars they have endured for years," said Mona Mohammed, a Yemeni journalist living in Cairo.

The financial and logistical support the Houthis receive is the main reason they have been able to hold out and continue to threaten Yemen's people and its neighbour, Saudi Arabia, she told Al-Mashareq.

"The confiscation of weapon and oil shipments or any prohibited goods before they reach the Houthis is an achievement that primarily serves the interest of the Yemeni people," she said.

Though Iran claims the sanctions "will not affect its operations in the region", the regime is being dealt successive blows with US seizures of oil and prohibited goods, said Fathi al-Sayed of al-Sharq Centre for Regional and Strategic Studies.

US operations are draining the IRGC's resources, at a time when it was already experiencing an acute shortage of funding due to US sanctions, he told Al-Mashareq.

The Iranian regime's tricks to circumvent sanctions have become useless, as the recent US sanctions also targeted entities in countries such as China and Singapore, in addition to Iran, he said.

Therefore, the tactic of using companies as a cover no longer works as a way to circumvent the sanctions or carry out smuggling operations, al-Sayed noted.