CED Newsletters & Policy Alerts

Policy Alert: “Maximum Pressure” Policy on Iran and Iranian Oil

February 06, 2025

Action: National Security Presidential Memorandum “NSPM-2”

What it does: The Memorandum, which calls Iran “the world’s leading state sponsor of terror,” is intended to impose “maximum pressure” on Iran, deny Iran “all paths to a nuclear weapon,” and counter “Iran’s malign influence.” It directs greater sanctions and enforcement related to US sanctions to deny Iran and its proxies access to revenue and sets a very difficult goal for a “robust and continual campaign . . . to drive Iran’s oil exports to zero,” including exports to China. It will add to the more than 600 sanctions the US has placed on Iran and Iranian persons. Further details will come in the form of regulations and guidance from the Treasury Department.

Key Insights

• The Memorandum notes Iran’s sponsorship of terrorist networks, including in the US, as well as what it describes as Iran’s responsibility for Hamas’ attacks on Israel on October 7, 2023, and the Houthis’ attacks on shipping in the Red Sea.
• The Memorandum asserts that “Iran’s nuclear program, including its enrichment- and reprocessing-related capabilities and nuclear-capable missiles, poses an existential danger to the United States and the entire civilized world. A radical regime like this can never be allowed to acquire or develop nuclear weapons, or to extort the United States or its allies through the threat of nuclear weapons acquisition, development, or use.”
• It asks the Treasury Department to issue guidance to business sectors including shipping, insurance, and port operations about the risks of violating US sanctions on Iran or its proxies and consider adoption of a “Know Your Customer’s Customer” standard “to further prevent sanctions evasion.” This also includes efforts to prevent using Iraq or the Gulf states for sanctions evasion.
• It also calls for a review of steps that provide “any degree of financial relief” to Iran, with particular focus on the joint India-Iran Chabahar port project, Iran’s only commercial port outside the Gulf.
• When Iran and India signed the agreement to develop the port in May 2024, the Biden Administration warned that it could impose sanctions on the project, which will now be imposed. (Chabahar had received a waiver from sanctions in 2018 under the first Trump Administration.) This will likely be a subject of discussion during Indian Prime Minister Modi’s forthcoming visit to Washington.
• Exports of Iranian oil rose almost 11% in 2024, to about 1.6 million barrels per day, as its sanctions-busting “shadow fleet” has expanded even after the US blocked some shipments of Iranian oil. The Biden Administration imposed further sanctions on the shadow fleet in December.
• Besides the tools in the Memorandum, the Administration could also use the 2024 Stop Harboring Iranian Petroleum Act, which requires the President to impose sanctions against foreign persons knowingly taking any steps to process, transport, or deal in Iranian oil and petroleum products.