US Reimposes Sanctions on Iran's Oil, Financial Sectors

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Iran's military forces staged war exercises and its president defiantly vowed to "break" U.S. sanctions on oil sales that were reimposed today, as Tehran resisted a Trump Administration pressure campaign aimed at isolating the country economically.

However, US allies in Europe have strongly disagreed with Trump's decision saying the Iranians have been complying with the nuclear agreement and said they will find ways to bypass the sanctions to allow their companies to keep doing business with Iran.

The US says the sanctions, which US Secretary of Pompeo billed as the "toughest sanctions ever", are aimed at persuading Iran to "alter" its behavior, including its support for regional terrorist groups like the Hezbollah and its development of long-range ballistic missiles.

USA officials have said the aim of the sanctions is eventually to stop all Iran's oil exports.

"The U.S. designated a bank that was closed 6 years ago, and a ship that sank.in a widely televised saga", he wrote, ending the tweet with "(hashtag) USisIsolated".

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The US side was unmoved.

U.S. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on November 2 said that, despite granting the waivers, Washington would "aggressively enforce" the sanctions.

"We are in the war situation", President Hassan Rouhani said in a television address as the sanctions snapped into place.

"We hope a new agreement with Iran is possible, but until Iran makes changes in the 12 ways that I listed in May, we will be relentless in exerting pressure on the regime", said Pompeo.

"It's expected to provide South Korean firms with more opportunities for the trade of non-sanctions items such as medical products, processed food and home appliances, although the exports of some products including steel and automobile parts will be affected by the sanctions", the source said.

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Aside from restrictions on oil imports, the administration added more than 700 names - including individuals, entities, vessels and aircraft linked to the energy and financial sectors and other segments of Iran's economy - to the USA list of sanctioned entities. Other parties to the deal, including Britain, France, Germany, China and Russian Federation, have said they will not leave the deal. The measures that came into effect on Monday restore all the sanctions that had been lifted under the accord that gave Iran billions of dollars in sanctions relief in exchange for curbs on its nuclear program.

The sanctions could be particularly harmful to Iran's vital oil industry. But this has faced a set back with the FT reporting that the global financial messaging system based in Belgium, saying that it would comply with the restored U.S. sanctions and suspend "certain Iranian banks'" access to its cross border-payment network. Analysts say if it can not sell enough oil using conventional means, it may resort to large-scale smuggling overland.

China's waiver, like the others, is not a pass to purchase Iranian crude oil indefinitely. Right now we have a history last time around of India, Turkey and China continuing to buy even with sanctions. Most Europeans, as well as Japan and South Korea, have stopped.

Last year, Iran was the sixth-biggest oil exporter in the world.

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