Sanctions on Iran's oil working, U.S. says

June 5, 2013 at 8:01 AM   |   0 comments

WASHINGTON, June 5 (UPI) -- U.S. laws targeting foreign purchases of crude oil from Iran left a detrimental mark on the country's oil revenues, a U.S. Treasury Department official said.

President Obama signed an executive order this week targeting the Iranian currency, the rial. Sanctions were tightened by the Treasury Department in February in a way that it said would restrict Iran's ability to use oil revenue that may be held in foreign banks.

Undersecretary for Terrorism and Financial Intelligence David Cohen testified before the Senate Committee on Banking, Housing and Urban Affairs on financial sanctions targeting the Iranian oil sector.

He said laws in place that offer Iranian customers relief from sanctions if they cut back on crude oil purchases gives protection against market volatility while striking a blow against the Iranian economy at the same time.

"This law, working in tandem with our efforts targeting Iran's access to the international financial system, has had an enormous impact on Iran's oil revenues," he said in Tuesday testimony.

Iranian President Mahmoud Ahmadinejad said last year the decline in the value of the rial was in part because of economic sanctions.

Sanctions imposed on Iran's energy sector are meant to rob it of revenue to finance its nuclear program. U.N. inspectors said they have concerns about the intent of the program though Iran says it's for peaceful purposes.

The Treasury Department said Tuesday it was targeting the assets of Iranian leaders after it said it identified a "massive network of front companies" hiding assets on behalf of the government.

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