Two US lawmakers introduced a bipartisan bill urging the European Union to list Iran's Islamic Revolutionary Guard Corps a terrorist organization to present a united Western front against Tehran's military operations in the Middle East.
The Revolutionary Guards are a paramilitary and intelligence organization which helps arms and trains Shi'ite armed groups in the region.
US President Donald Trump designated the IRGC a terrorist organization in 2019 and ordered the assassination of its commander Qassem Soleimani in a drone strike in Baghdad the next year.
The European Union has so far held off on such a designation for the IRGC as a whole though it has designated individuals in the organization. None of the EU member states list it as a terrorist organization.
"To defeat the IRGC, which is responsible for sponsoring terrorist attacks against innocent civilians across the globe, the United States cannot act alone," congresswoman Claudia Tenney, a co-sponsor of the so-called Encouraging the EU to DESIGNATE Resolution, said in a statement.
"It's time for our EU allies to step up and follow suit .. this will send a strong message that the West is united against the IRGC's malicious actions and that we will hold them accountable for their vile acts of terrorism," the New York Republican added.
The EU has designated the Palestinian armed movement Hamas and the military wing of Lebanese Hezbollah terrorist organizations. Both groups, along with the Houthi group in Yemen and various militias in Iraq are backed by IRGC.
A full terrorism designation imposed on the IRGC would enable European law enforcement greater police and investigatory powers to prosecute Iranian officials and organizations.
The classification could also have profound dent European-Iran trade relations, as the IRGC controls a large portion of the Islamic Republic's economy.
“With Tehran more isolated than ever, now is the time to tighten the screws— we must not ease up or give the IRGC room to regroup," congressman Brad Schneider said.
"The US and Canada have already acted, and I urge our European allies to join us," the Illinois democrat said.
The sanctions announced on February 24 followed similar measures by the US Treasury in late 2024, targeting ultra-large crude carriers in Iran's shadow fleet.
Such vessels, widely referred to as VLCCs, or very large crude carriers, can carry up to 2 million barrels of oil, far more than what a normal or large tanker can carry.
The VLCCs are essential for Iran's oil shipment, hence their targeting by the US Treasury since October last year.
With the latest US sanctions imposed by the Trump administration, nearly two-thirds of the 126 VLCCs shipping Iranian oil have now been blacklisted, according to oil tanker tracking data, forcing a significant number to abandon Iran and turn to transporting Russian oil.
Trump administration’s long road
Although stricter sanctions have complicated oil transportation for Iran’s VLCCs, claiming that Iran’s oil exports will face severe disruption and a catastrophic decline would be an exaggeration.
United Against Nuclear Iran (UANI) has identified 503 tankers with a combined capacity of 61 million tons of oil (over 350 million barrels), but sanctions currently cover less than 45% of this total capacity.
An investigation by Iran International shows that to maintain an average daily oil transit of 1.3 million barrels, as observed in recent months, Iran needs 45 VLCCs. Currently, 47 VLCCs linked to Iranian oil smuggling remain unsanctioned.
Meanwhile, dozens of VLCCs worldwide have surpassed 20 years of age in the past year, with each valued at an average of $25 million. Operators of the shadow fleet could potentially purchase some of these aging vessels. Notably, the number of foreign tankers involved in smuggling Iranian oil has surged sevenfold over the past five years.
In January 2024, China banned sanctioned tankers from docking at Shandong Port, its largest terminal for Iranian crude imports, causing Iranian oil offloading to drop to 850,000 barrels per day. However, a recent policy shift privatized part of the port, facilitating the reception of sanctioned crude cargoes. As a result, Iranian oil discharges in China surged to over 1.7 million barrels per day in February, according to industry intelligence firm Kpler.
Thus, it appears that the US still has a long road ahead to achieve what Treasury Secretary Scott Bessent described as a “90% reduction goal” in Iran’s oil exports.
Previously, several oil tanker tracking companies, in interviews with Iran International, estimated that Iran’s daily oil exports could drop by one-third in the coming months. However, they all agreed that such a scenario depends entirely on China's cooperation with the US.
Iran’s Difficult Situation
While foreign energy analysts and media mostly focus on Iran’s oil export volumes, the most critical issue for Iran—and especially for the US—is its oil export revenue.
Oil tanker tracking data from recent months indicate that Iran’s export volume has declined by around 25%. However, Iran’s domestic financial data suggests that its oil revenue has been cut in half, dropping below $1.8 billion per month.
This clearly highlights the soaring costs Iran has incurred to bypass US sanctions in recent months.
Meanwhile, Masoumeh Aghapour, an economic advisor to Iran’s president, acknowledged the country’s severe foreign currency shortages on February 25, just a day after the latest US sanctions targeted oil-related companies and tankers.
“We have a currency problem. Let’s be frank. Trump has played a major role in our forex market. The situation has become exponentially more difficult for us in the past two weeks,” she said.
Since early September, Iran’s national currency, the rial, has lost half of its value due to setbacks in the region and Trump’s election, as he has pledged to significantly cut Tehran’s oil exports.
