Oil prices fall as U.S. sanctions on Iran begin, Tehran defiant

Khamenei was speaking on the eve of the anniversary of the 1979 takeover of the US embassy in Tehran

Khamenei was speaking on the eve of the anniversary of the 1979 takeover of the US embassy in Tehran

The new sanctions will be directed toward energy, shipping, shipbuilding, and financial sectors, representing the "final round of snapback sanctions" as a result of the United States' withdrawal from the Obama-era Iran nuclear deal (formally known as the Joint Comprehensive Plan of Action, or JCPOA), they said.

Speaking on CBS' "Face the Nation," Pompeo said the sanctions are created to "alter" Iran's behavior, especially its support for resistance groups like Hezbollah in Lebanon.

Iranian state television aired footage of defense drills taking place in the country's north through Tuesday as President Hassan Rouhani said the nation faces a "war situation" against a "bullying enemy". "The maximum pressure we imposed has caused the rial to drop dramatically, the country's Cabinet is in disarray, and the Iranian people are raising their voices even louder against a corrupt and hypocritical regime". "Many countries from Europe to Russian Federation and China have opposed the sanctions", Ghasemi told journalists, adding that Iranians "have experienced more extensive sanctions" and that they are "not a new issue".

Monday's sanctions are the second batch the Trump administration has reimposed on the Islamic Republic since it withdrew from the nuclear agreement earlier this year.

Mr. Trump himself has embraced the sanctions as he faces a tough mid-term election in the US that could change the balance of power in Congress.

The top commander of Iran's elite Revolutionary Guards, Major General Mohammad Ali Jafari, said at the Tehran rally that Iran would resist and defeat a USA "psychological war" and the return of U.S. sanctions, meant to cripple the Islamic Republic's oil exports and financial institutions.

But oil shipments from Iran to South Korea, India and Japan are set to return to their original levels when the Trump waivers are signed, a move US Secretary of State Mike Pompeo has promised will be detailed on Monday.

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The Trump administration though has granted exemptions to eight countries to continue importing Iranian oil, without naming them. He has issued a list of 12 demands that Iran must meet to get the sanctions lifted, including an end to its support for terrorism and military engagement in Syria and a halt to nuclear and ballistic missile development.

Pompeo responded by saying that no one would call either himself or President Trump soft on Iran.

There have also been concerns about the price and supply of oil globally, meaning that without some Iranian oil the price might increase too fast - the price already having been much higher in recent months. "And we're going to provide that to them".

Senior Iranian officials have dismissed concerns about the impact to its economy.

"If Trump fails in his economic war against Iran - and I believe he will - it will signal to the world that the dollar can no longer be used as a foreign policy weapon", Oborne said.

Iran is already in the grip of an economic crisis. The renewed sanctions are designed "to paralyse the (Iran's) economy and keep it backwards".

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