“Our actions are making it harder and more expensive at every turn to continue destabilizing Iran,” Yellen said in a statement. “We will continue to use our sanctions authority against Iran with further action in the coming days and weeks.”
The new sanctions, which the administration signaled earlier this week, are designed to quell rather than inflame tensions in the region as President Biden seeks to stem the spread of hostilities in the Middle East.. Some critics have pushed the administration to go further to reduce revenues for Iran's government by allowing China to buy large quantities of Iranian oil. The Treasury Department has taken some steps to allow Chinese companies to make such purchases, but a more ambitious crackdown would risk pushing up global oil prices and therefore higher U.S. gas prices in an election year.
The administration, at least for now, has largely avoided such an expansion. Instead, the administration's sanctions on Thursday focused on targets inside Iran.
Sanctions cut off targets for banks and other financial institutions that use the US dollar. But it's unclear how many Western companies are helping Iranian drone production, especially since the Iranian economy already has minimal ties to the Western economies of the United States and its allies.
The West already has sanctions on Iran's drones because of their use by Russian forces in Ukraine, said Rachel Ziemba, deputy senior fellow at the Center for a New American Security, a foreign policy think tank. “I see this a lot,” he said. “This is not a serious move to try to block energy revenue, and I suspect that the names involved are relying on US dollar nexus points, which could reduce their performance.”
Before the Oct. 7 attacks on Israel revived regional tensions, Iran's economy was one of the most permissive in the world. The United States has imposed economic sanctions on Iran since 1979, and the Trump administration significantly increased economic pressures after 2018 when it pulled out of the Iran nuclear deal reached by the Obama administration.
The targets of the latest sanctions include 16 people and two companies that operate Iran's drone production. Five companies supplying supplies to Iranian steelmaker Ghouzestan Steel have also been sanctioned. Treasury also sanctioned three subsidiaries of an Iranian automaker accused of supporting the Iranian regime.
Iran launched more than 300 drones and missiles at Israel over the weekend in response to Israel's brutal attack on the Iranian embassy in Syria. The Iranian attack did not cause major damage or injuries, as Israeli, US and other forces intercepted most of the barrage.
