The U.S. Treasury Department on Friday imposed sanctions on Iran’s largest petrochemical holding group, Persian Gulf Petrochemical Industry Co. (PGPIC), as well as its network of 39 subsidiaries and foreign-based sales agents, over its support for the construction arm of the Islamic Revolutionary Guard Corps (IRGC).
PGPIC and its subsidiaries hold 40 percent of Iran’s total petrochemical production capacity and are responsible for half of the country’s total petrochemical exports, the Treasury said. PGPIC has awarded hundreds of millions of dollars in major engineering, procurement, and construction contracts to Khatam al-Anbiya, the engineering conglomerate of the IRGC, according to the Treasury. In April, the U.S. designated the IRGC as a Foreign Terrorist Organization (FTO), though the Iranian paramilitary force was already subject to several rounds of sanctions.
“By targeting this network we intend to deny funding to key elements of Iran’s petrochemical sector that provide support to the IRGC,” said Treasury Secretary Steven T. Mnuchin.
A former Treasury official told Reuters that the effects of Friday’s sanctions would be modest. “I don’t think most of the large multinationals were dealing with them anyway. It’s a good way of keeping political pressure on the front page,” the former official said.
The U.S. reimposed sanctions on the purchase, acquisition, sale, transport or marketing of petrochemical products from Iran in November following the U.S. exit from the nuclear deal. Petrochemicals are one of Iran’s largest exports, after crude oil.
As tensions between the U.S. and Iran have escalated over the past few months, Secretary of State Mike Pompeo said Friday that Washington’s maximum pressure campaign is aimed at depriving Tehran “of the funding it needs to sustain its expansionist foreign policy.”
Reza Ebadzadeh, an executive of PGPIC subsidiary Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), said last month that the parent company’s goods were being sold on the market just as they were before the reimposition of sanctions, according to Shana News, the official news agency of Iran’s oil ministry. Bijan Zanganeh, Iran’s oil minister, said at a recent oil conference in Tehran that the country hopes to generate $36 billion in petrochemical sales by 2021, nearly doubling 2015 levels, according to the Wall Street Journal.