The US has targeted Iran’s petrochemical industry with new sanctions announced by Treasury Secretary Steven Mnuchin on May 7.

There have been reports that the US is finding it more difficult to close loopholes in preventing lucrative exports by the Iranian petrochemical industry than it is when it comes to stopping shipments of crude oil from Iran, which since the start of last month it has been attempting to force to zero.

The new sanctions target entities including Iran’s biggest petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC), which the US Treasury Department says supports the Islamic Revolutionary Guard Corps (IRGC).

PGPIC has been added to the sanctions list for providing financial support to the economic arm of the IRGC. The Treasury also designated the holding group’s network of 39 subsidiary petrochemical companies and foreign-based sales agents. PGPIC and its subsidiaries account for 40% of Iran’s petrochemical production capacity. They are also responsible for 50% of Iran’s total petrochemical exports, the Treasury said.

“By targeting this network we intend to deny funding to key elements of Iran’s petrochemical sector that provide support to the IRGC,” Treasury Secretary Steven Mnuchin said in a statement.

The Treasury statement added that Iran’s oil ministry last year awarded the IRGC’s Khatam al-Anbiya, the IRGC’s economic and engineering arm, 10 projects in oil and petrochemical industries worth $22bn, four times the official budget of the IRGC.

The US in April made the unprecedented move of officially designating the IRGC as a foreign terrorist organisation (FTO). In response, Iran listed the US military’s CENTCOM, which covers operations in the Middle East, as terrorist.

The Trump administration is attempting to strangle the Iranian economy to the point that Tehran comes to the table to renegotiate its role and activities in the Middle East, and agrees tighter restrictions on its nuclear and ballistic missile development programme.

The UK, France, Germany, China and Russia—which like Iran are still signed up to the 2015 nuclear deal—oppose the US policy. However, this past week has seen Paris make calls for wider talks over Tehran’s nuclear and military ambitions. Tehran responded that it would not hold any discussions with the nuclear deal signatories beyond the 2015 pact which Donald Trump unilaterally pulled the US out of in May 2018.

“The Europeans have so far failed to fulfil their commitments under the deal and... to protect Iran’s interests after America’s illegal withdrawal,” Iranian foreign ministry spokesman Abbas Mousavi said in a June 7 statement, according to state TV.

The US sanctions regime applied to Iran amounts to an "economic war", Tehran says.