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Weapons of Mass Destruction (WMD)

US Moves to Disrupt Iran's Oil Distribution Network

By Steve Herman September 4, 2019

As the United States took action Wednesday to disrupt an Iranian oil shipping network it accuses of funding terrorism, President Donald Trump expressed optimism about engaging in diplomacy with Tehran.

"They want to talk. They want to make a deal," Trump told reporters in the Oval Office, when asked about the new sanctions announced by the Treasury Department and whether he is willing to meet with Iranian President Hassan Rouhani, during this month's United Nations General Assembly session.

The president reiterated that the United States is "not looking for regime change."

"They have tremendous potential and I think they're going to want to take advantage of that," Trump said Wednesday.

Iran announced late Wednesday a further scaling back of its commitments to the 2015 nuclear deal with world powers.

This involves "the development of centrifuges. We will take this step on Friday," Rouhani said in a televised speech.

Trump, last year, withdrew the United States from the pact, known as the Joint Comprehensive Plan of Action (JCPOA).

Word of Iran's further backing away from the JCPOA by comes just after the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced sanctions on 10 individuals, 16 entities and 11 vessels alleged to be directed by and financially supporting the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF) and its terrorist proxy Hezbollah.

"Iran continues to take provocative actions to destabilize the region and the world. Treasury's action against this sprawling petroleum network makes it explicitly clear that those purchasing Iranian oil are directly supporting Iran's militant and terrorist arm, the IRGC-Quds Force," U.S. Treasury Secretary Steven Mnuchin said in a statement Wednesday. "Our actions over the last two weeks should serve as a strong warning to anyone considering facilitating the Quds Force's oil sales that there will be swift consequences."

According to the Treasury Department, over the past year, the IRGC-QF has moved oil worth hundreds of millions of dollars or more through the network benefiting Syria's regime, Hezbollah, and other illicit actors.

OFAC is also issuing a new shipping advisory to the international maritime community, warning of these types of schemes and the sanctions risks associated with blocked persons.

Although the U.S. is not likely to succeed in squeezing off all of Iran's oil exports, the key – according to government officials and analysts – is to create enough stress and pressure on Tehran's government.

"The Iranians aren't stupid," James Carafano, the Heritage Foundation's vice president for national security, told VOA. "As you sanction activities, they're going to develop workarounds and other ways to move money around the oil route. And then you're going to have to sanction those. So, if you're serious about keeping the pressure on, it is kind of a dynamic game of cat and mouse."

Part of that game currently involves an Iranian oil tanker, the Adrian Darya 1 (formerly known as the Grace 1), released by Gibraltar and at the center of a stand-off between Tehran and the West.

Its captain, Akhilesh Kumar of India, is refusing to offload the ship's oil in a Syrian port and is looking to be relieved of his command, according to U.S. officials.

The U.S. representative for Iran, Brian Hook, has sent e-mails to Kumar, offering him a multimillion-dollar reward if he will steer the vessel to a friendly port where it would be impounded on behalf of the United States, the Financial Times reported.

"We have conducted extensive outreach to several ship captains as well as shipping companies warning them of the consequences of providing support to a foreign terrorist organization," a State Department official told VOA.

The Adrian Darya 1 was seized by British commandos off Gibraltar in July on suspicion it was carrying Iranian oil to Syria in breach of European Union sanctions. After Iran promised the oil would not be delivered to Syria, a court in the British territory ordered the ship released, amid efforts by the U.S. to seize it.

Hook announced Wednesday "a reward of up to $15 million for any person who helps us disrupt the financial operations of Iran's Revolutionary Guard Corps and Quds Force."

Hook also told reporters at the State Department that the United States will not provide any sanctions waivers to accommodate a French proposal to extend a $15 million credit line to Tehran.

"We did sanctions today. There will be more sanctions coming. We can't make it any more clear that we are committed to this campaign of maximum pressure and we are not looking to grant any exceptions or waivers," said Hook.

"It would be helpful if Iran would meet our diplomacy with diplomacy instead of kinetic force," Hook told reporters. "The president's made clear we do not want to see a conflict in the Middle East. But we're also going to intensify our maximum pressure campaign because [in terms of] Iran, we need to deny it the revenue it needs to fund its foreign policy."

On Tuesday, the U.S. imposed its first-ever sanctions against Iran's space agency and related institutes, accusing them of disguising a missile program.

The U.S. says Iranian space launch vehicle technology is "virtually identical and interchangeable with those used in ballistic missiles," including ways of controlling a missile during its flight.

Patsy Widakuswara and Nike Ching contributed to this report.

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