The Treasury Department announced Friday morning a new round of sanctions targeting twenty three entities and eleven vessels connected to what officials described as Iran's shadow oil fleet. The action came hours before a US delegation was expected to touch down in Islamabad for peace talks that have already been strained by disputes over Lebanon and the Strait of Hormuz.
Treasury Secretary Scott Bessent said in a statement released through the Office of Foreign Assets Control that the sanctions targeted shipping companies operating out of the United Arab Emirates, Hong Kong and Malaysia that Treasury alleges have been moving Iranian crude oil in violation of existing sanctions. The announcement named four specific tankers that Treasury said had conducted ship to ship transfers with Iranian vessels in international waters over the past eight weeks.
The sanctions freeze any assets those companies hold in US financial institutions and bar American banks from processing transactions connected to them. Foreign banks that continue doing business with the sanctioned entities could face secondary sanctions under authorities Congress reinforced in 2024. Treasury officials told reporters on a background call that the action had been planned for weeks but was timed to send a message ahead of the Islamabad talks.
Iran's foreign ministry responded within hours, calling the sanctions a bad faith move on the eve of negotiations. Spokesman Esmaeil Baghaei told state media the announcement proved the United States was not serious about a durable peace. Iran maintains that the 2015 nuclear agreement and subsequent sanctions regime are the root cause of the current crisis and has demanded sanctions relief as a precondition for substantive talks.
The move puts additional pressure on oil markets that have already been rattled by the near total closure of the Strait of Hormuz. Brent crude traded near 99 dollars a barrel in early Friday trading, off its mid week highs above 100 but still roughly 30 percent above where it started the year. Goldman Sachs analysts wrote in a note to clients Friday morning that they now expect oil to average above 100 dollars for the full calendar year, up from their previous forecast of 92.
For American households, the pressure continues to show up at the gas pump. AAA reported a national average of 4.51 dollars per gallon Friday morning, up 68 cents from a month ago. States in the West and Northeast are seeing averages above 5 dollars, and some stations in California have posted prices above 6 dollars. The administration has quietly resumed releasing oil from the Strategic Petroleum Reserve but has not confirmed the pace.
Congressional reaction split along familiar lines. Senate Foreign Relations Committee Chairman Jim Risch praised the sanctions as a necessary step to hold Iran accountable, while ranking member Chris Van Hollen warned that piling on new sanctions at the same moment American diplomats are sitting down for talks sends a confusing signal to allies and adversaries alike. Van Hollen called for a full briefing next week.
The sanctions are expected to complicate the work of US negotiators led by Vice President JD Vance, who left Washington Thursday for Pakistan. Steve Witkoff and Jared Kushner are also part of the delegation. Iran has said it will demand that any ceasefire deal include a pathway to unfreeze roughly 6 billion dollars in Iranian assets held in foreign banks, a demand the White House has so far refused.
Analysts at the Washington Institute for Near East Policy said the Treasury action should be understood as leverage, not escalation. They noted that the United States has used sanctions timing strategically during past rounds of Iran diplomacy, including the JCPOA negotiations in 2013 and 2014. The risk is that Iranian negotiators use the sanctions as a pretext to harden their positions or walk out.
For Pakistan, hosting the talks carries its own complications. Prime Minister Shehbaz Sharif has told his cabinet the government wants to emerge as a credible mediator, but Islamabad is also under pressure from Gulf partners who want Iran brought to heel. Security around the talks has been tightened, with shipping containers blocking streets near the Prime Minister's House and a partial internet shutdown in parts of the capital.
The next 48 hours will be the clearest test yet of whether the ceasefire that went into effect last month can survive the pressure of real negotiations. Treasury said more sanctions designations could follow depending on how the talks unfold. For now, oil traders, shipping executives and diplomats are all watching Islamabad, where the first substantive session is expected Saturday morning local time.