Biden admin sanctions Iran’s oil sector as response to Oct. 1 attack on Israel

The Biden Administration announced new sanctions against Iran’s oil and petrochemical sectors as a response to the October 1 attack in which Iran fired approximately 200 missiles into Israel. The sanctions largely target what’s called Iran’s ‘ghost fleet’ of ships which illegally transport oil to buyers in Asia. 

“(The) sanctions target Iranian efforts to channel revenues from its energy industry to finance deadly and disruptive activity—including development of its nuclear program, the proliferation of ballistic missiles and unmanned aerial vehicles, and support to regional terrorist proxies,” Treasury Secretary Janet Yellen said in a statement. 

In total, the sanctions designate 17 vessels as ‘blocked property’ which means the assets under US jurisdiction are frozen but not seized. The ships are owned by companies mostly in the Middle East and Asia including the United Arab Emirates, China, Malaysia and one in Liberia. The sanctions also target 10 companies which, according to Treasury, knowingly engaged in the transport, sale or marketing of Iranian petroleum and petrochemical products. 

Secretary of State Antony Blinken said in a statement: The United States is committed to curtailing Iran’s sources of revenue for its malign activities.  As long as Iran devotes its energy revenues to funding attacks on our allies, supporting terrorism around the world, and pursuing other destabilizing actions, we will continue to use all the tools at our disposal to hold it accountable.

Iran’s attack on Israel is also impacting the broader oil market. Brent crude, the international benchmark for oil, has increased about 15% since the attack. That’s impacting the price of gas here in America. 

According to GasBuddy, the national average price for a gallon of gas as of October 14 was $3.16, about 3 cents higher than the week before. 

“The national average price of gasoline has returned to a slight climb over the last week as Iran’s attack on Israel has slowly funneled to the gas pump, as expected,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

De Haan projected a decline in gas prices over the next few weeks and said there’s a good chance the national average could dip below $3 per gallon for the first time since 2021. 

For context, the current price for a barrel of the benchmark West Texas Intermediate crude is $74.11 and the national average for a gallon of gas is $3.16. The last time the national average was below $3 in May 2021, WTI cost $63.87 per barrel. On the flip side, if a barrel of crude went up to $100, the price for a gallon of gas could reach $4 or more.