Tehran- Iran greeted the re-imposition of US sanctions on Monday with air defence drills and an acknowledgement from President Hassan Rouhani the nation faces a “war situation,” raising Middle East tensions as America’s maximalist approach to the Islamic Republic takes hold.

The sanctions end all the economic benefits America granted Tehran for its 2015 nuclear deal with world powers, though Iran for now continues to abide by the accord that saw it limit its enrichment of uranium. While for now not threatening to resume higher enrichment, Iranian officials in recent months have made a point to threaten that could resume at any time faster than before.

The new American sanctions particularly hurt Iran’s vital oil industry, a crucial source of hard currency for its anaemic economy. Its national currency has plummeted over the last year, sending prices for everything from mobile phones to medicine skyrocketing.

“Today, Iran is able to sell its oil and it will sell,” Rouhani vowed Monday as the sanctions kicked in.

Iranian state television aired footage of air defence systems and anti-aircraft batteries in two-day military manoeuvres underway across a vast stretch of the country’s north. It included surface-to-air missiles shooting down a drone.

The drill was to continue through Tuesday. Iranian army Gen. Habibillah Sayyari said both the national army and the country’s paramilitary Revolutionary Guard were taking part in the exercise.

Rouhani, meanwhile, pledged to government officials in comments aired on state TV that Iran would overcome the sanctions.

“We are in the war situation,” Rouhani said. “We are in the economic war situation. We are confronting a bullying enemy. We have to stand to win.”

He said: “I announce that we will proudly bypass your illegal, unjust sanctions because it’s against international regulations. We are in a situation of economic war, confronting a bullying power. I don’t think that in the history of America, someone has entered the White House who is so against law and international conventions.”

The measures described by Washington as “the toughest sanctions ever” follow US President Donald Trump’s controversial decision in May to abandon the multi-nation nuclear deal with Tehran.

The United States has given temporary exemptions to eight countries - including India, Japan and Turkey - to continue buying oil in a bid to avoid disturbing their economies and global markets.

But US Secretary of State Mike Pompeo vowed to push Iran’s oil sales to zero.

“Watch what we do. Watch as we’ve already taken more crude oil off the market than any time in previous history,” he told CBS’s “Face the Nation” on Sunday.