Trump Orders 'Substantial Increase' Of Iran Sanctions

US President Donald Trump says he has ordered a major increase in sanctions on Iran as Saudi Arabia displayed remnants of drones and missiles said to have been used in a crippling weekend attack on its oil facilities.

"I have just instructed the Secretary of the Treasury to substantially increase sanctions on the country of Iran!" Trump wrote in a tweet on Wednesday.

He did not give details on the move and Tehran has denied it was behind the attack, which initially knocked out half of Saudi Arabia’s oil production and sent oil prices sharply higher.

Yemen’s Houthi movement, an ally of Iran battling a Western-backed, Saudi-led coalition for more than four years, has taken responsibility for the attack, a claim that Riyadh has dismissed as an attempt to cover up for Tehran’s involvement.

A U.S. official told Reuters the strikes originated in southwestern Iran. Three officials said they involved cruise missiles and drones, indicating a higher degree of complexity and sophistication than initially thought.

The White House and the Treasury Department did not immediately respond to requests to comment on what the sanctions could be.

But a former U.S. Treasury official said Washington could target the Islamic Republic with so-called secondary sanctions that could hamper the efforts of European allies still party to a nuclear deal with Iran that Trump pulled out of last year.

Satellite image from Planet Labs Inc., shows thick black smoke rising from Saudi Aramco's Abqaiq oil processing facility in Buqyaq, Saudi Arabia. Photo: AAP

"France has been floating the 15 bln credit line and there’s no way I could see the Trump administration letting that happen now,” the former official said.

In early September, France proposed offering Iran about US$15 billion in credit lines until year-end if Tehran comes fully back into compliance with the 2015 nuclear deal, but the whole arrangement would hinge on U.S. approval.

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“Though it’s presently unclear what these sanctions will target, if they are a response to Iranian escalation in the region they will need to go after any entity involved in the recent strike. Full stop,” Behnam Ben Taleblu, senior fellow at think-tank FDD said.

“Anything less and it will appear as Washington is pulling its punches,” he said.

Donald Trump has ordered further sanctions on Iran. Photo: Scott Olson/Getty Images)

An already-tense relationship between Iran and the United States has worsened over the past year, when Trump withdrew the United States from the nuclear pact with Iran and six other countries saying it did not go far enough, and reimposed sanctions on Iran.

Trump said he is not looking to meet Iranian President Hassan Rouhani during a U.N. event in New York this month.

Rouhani and his foreign minister may not attend the U.N. General Assembly at all unless U.S. visas are issued in the coming hours, Iranian state media reported Wednesday.