The United States has given a go ahead to eight countries allowing them to continue buying Iranian oil for the time been , Secretary of State Mike Pompeo said on Monday, as Washington reimposed sanctions on Iran's banking, energy and shipping industries.
Some of the eight countries – China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea – include OPEC member Iran's top customers.
US secretary of state Pompeo said more than 20 countries have already stopped their oil imports from Iran, reducing purchases by more than 1 million barrels per day.
The new sanctions are part of a wider effort by US President Donald Trump to curb Tehran's missile and nuclear programmes and diminish the Islamic Republic's influence in the Middle East.
It follows Washington's withdrawal from a 2015 international agreement on Iran's nuclear programme.
In a statement, US Treasury Secretary Steven Mnuchin said, "Treasury's imposition of unprecedented financial pressure on Iran should make clear to the Iranian regime that they will face mounting financial isolation and economic stagnation until they fundamentally change their destabilising behaviour."
The sanctions cover 50 Iranian banks and subsidiaries, more than 200 persons and vessels in its shipping sector, and targets Tehran's national airline, Iran Air, and more than 65 of its aircraft, the statement said.
Hours earlier, Iran’s Foreign Minister Mohammad Javad Zarif said the "bullying" restoration of oil and banking curbs was backfiring by making Washington more isolated, a reference to other world powers opposed to the initiative.
European powers which continue to back the nuclear deal said they opposed the re-application of sanctions and major oil buyer China said it regretted the move.
The move is part of a wider effort by Trump to force Iran to further limit its nuclear work and halt a missile programme, as well as end its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.
Switzerland said it was holding talks with the United States and Iran about launching a humanitarian payment channel to help keep food and drugs flowing to Tehran.
US sanctions permit trade in humanitarian goods such as food and pharmaceuticals, but measures imposed on banks and trade restrictions could make such items more expensive.
US Secretary of State Mike Pompeo said on Sunday the penalties returning on Monday were "the toughest sanctions ever put in place on the Islamic Republic of Iran."
However, Iran's clerical rulers have dismissed concerns about the impact of sanctions on the economy.
"Today the enemy [the United States] is targeting our economy ... the main target of sanctions is our people," Iranian President Hassan Rouhani said.