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An Iranian flag flutters on board the Adrian Darya oil tanker, formerly known as Grace 1, off the coast of Gibraltar. The US on August 30 sanctioned the vessel under an anti-terrorist order, and “anyone providing support to the Adrian Darya 1 risks being sanctioned Image Credit: AFP

Washington: US-Iranian relations lurched downward again Wednesday as the Trump administration unveiled sweeping new sanctions designed to tighten its stranglehold on Iran’s oil exports, and Iran announced it would take further steps away from restraints on its nuclear programme.

The administration took action against a shipping network it said was directed by Iran’s Islamic Revolutionary Guard Corps-Quds Force and designed to evade US sanctions imposed in November on Iranian oil exports.

In starkly worded warnings to international maritime and insurance interests, the United States declared that it would also sanction any individual or entity that did business with anyone connected to the network.

“Failure to take heed . . . bears grave consequences,” an administration official said, speaking on the condition of anonymity under administration rules.

The State Department also offered a $15 million reward for information that helps disrupt the network.

Trump-Rouhani meet?

The new sanctions came 10 days after President Donald Trump and Iranian President Hassan Rouhani indicated a willingness to meet.

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Trump and Rouhani Image Credit: AP

Trump repeated the offer Wednesday, even as White House and Treasury and State Department officials were discussing the new measures. The two leaders are to attend the annual United Nations General Assembly late this month.

“Sure. Anything is possible,” Trump said of that venue. “We could solve it in 24 hours.”

“We’re going to see what happens. They want to talk. They want to make a deal,” Trump told reporters at the White House. “We’re not looking for regime change. They have tremendous potential, and I believe they are going to want to take advantage of that.”

Rouhani, after first responding favorably, on Tuesday ruled out any bilateral discussions with the United States, saying Iran would talk to the administration only as part of multilateral negotiations after all sanctions have been lifted and the administration returns to the international nuclear deal from which Trump withdrew last year.

“We’ve said it before and we will say it again: We have no intention to hold bilateral talks with the United States. We never did and never will,” Rouhani said.

He said Iran will abandon restrictions on nuclear research and development, including on the advancement of centrifuges used to enrich uranium, as the next step toward reducing its commitments under the 2015 nuclear deal.

Mixed messages

Both sides appeared to be sending mixed messages, said Dennis Ross, a Middle East expert who advised Presidents Barack Obama and George H.W. Bush.

“Below Trump, there is one consistent set of messaging - we’re going to keep squeezing you until you realize that you have to come to the table. There is no give from us,” he said. But “at Trump’s level, the messaging is rather different.”

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Macron with Zarif at G7 Image Credit: AP

At the Group of Seven meeting last month in France, Trump spoke favorably of a proposal by French President Emmanuel Macron to compensate Iran in exchange for its full compliance with the nuclear deal. At a summit news conference, Trump seemed “not only to acknowledge that, but then goes along with the whole idea of a line of credit . . . and the implication we wouldn’t oppose it,” Ross said.

This week, France proposed a $15 billion line of credit, and Macron sent his finance minister to discuss it with US officials.

Trump changes mind

On Wednesday, however, Trump seemed to have changed his mind about the wisdom of that approach.

“I very much appreciate President Macron’s involvement but we’re not dealing through President Macron. We’re dealing with people directly,” Trump said. “They said until we do certain other things, like drop sanctions, and that’s not happening, that won’t be happening.”

France, along with the other signatories who remain in the 2015 nuclear deal - Britain, Germany, Russia, China and the European Union - has spearheaded efforts to keep it afloat, even as the administration has denounced it as inadequate and called for it to be renegotiated.

Iran slowly lifting restrictions

Iran has begun to ease away from its terms, protesting that US sanctions have taken away the economic benefits promised in exchange for Iran’s limiting its nuclear program.

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File photo of Iranian workers standing in front of Bushehr nuclear power plant Image Credit: Reuters

On Wednesday, Rouhani said the new steps he announced would have an “extraordinary” impact on, and considerably elevate, Iran’s nuclear energy program. Experts have said all the Iranian steps taken thus far are reversible.

New deadline

Europe has been given “another two-month deadline for negotiations, an agreement and a return to its commitments,” Rouhani said. Iranian television quoted Deputy Foreign Minister Abbas Araghchi as tying the new deadline directly to Macron’s proposal.

“Our return to the full implementation of the nuclear accord is subject to the receipt of $15 billion,” Araghchi said. “Otherwise, the process of reducing Iran’s commitments will continue. Either Europe has to buy oil from Iran or provide Iran with the equivalent of selling oil as a credit line guaranteed by Iran’s oil revenue.”

When strict US oil sanctions were imposed last fall, five countries that depended heavily on Iranian oil - China, India, Japan, South Korea and Turkey - were given temporary waivers. Those waivers were ended in May, a decision the White House said was “intended to bring Iran’s oil exports down to zero, denying the regime its principal source of revenue.”

Failing economy

With exports slashed more than 80 percent, the Iranian economy is believed to be close to collapse.

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Hezbollah supporters in Lebanon Image Credit: Reuters

As a result, the administration contends that has cut Iran’s financial and weapons support to proxy groups that the United States has designated as terrorist, including Hezbollah in Lebanon and Hamas in Gaza, both of them avowed enemies of US ally Israel.

The latest sanctions come one day after the Treasury Department sanctioned Iran’s space agency, accusing it of trying to develop ballistic missiles under the guise of working on communications satellites.

US cash offer

Meanwhile, a senior US official personally offered several million dollars to the Indian captain of an Iranian oil tanker suspected of heading to Syria, the State Department confirmed Wednesday.

The Financial Times reported that Brian Hook, the State Department pointman on Iran, sent emails to captain Akhilesh Kumar in which he offered “good news” of millions in US cash to live comfortably if he steered the Adrian Darya 1 to a country where it could be seized.

“We have seen the Financial Times article and can confirm that the details are accurate,” a State Department spokeswoman said.

“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,” she said, referring to Iran’s elite Revolutionary Guards.

The Adrian Darya 1 was held for six weeks by the British overseas territory of Gibraltar on suspicion that it was set to deliver oil from Iran to its main Arab ally Syria - a violation of European Union sanctions on President Bashar al-Assad’s iron-fisted regime.

Gibraltar released the ship, formerly called the Grace 1, on August 18 over US protests after receiving written assurances that the vessel would not head to countries sanctioned by the European Union.

US authorities said that Kumar, 43, took over as captain in Gibraltar. After he apparently did not respond to the US offer, the Treasury Department on Friday imposed sanctions both on the ship and on Kumar himself, freezing any assets he may have in the United States and criminalizing any US financial transactions with him.

“Any US or foreign persons that engage in certain transactions with designated persons or entities may themselves be exposed to sanctions,” the State Department spokeswoman said.

The Adrian Daya 1 has been elusive since sailing off from Gibraltar, with monitors reporting that it has been moving in the eastern Mediterranean near Lebanon.

The United States also announced Wednesday that the United States was imposing sanctions on a shipping network alleged to be tied to the Revolutionary Guards - and offering up to $15 million for information that could disrupt the unit’s finances.

The shipping network sold more than $500 million this spring, mostly in Syria, according to the Treasury Department.

The United States has unilaterally threatened sanctions aimed at ending all oil sales by Iran in a bid to diminish the clerical regime’s regional influence.