Washington, D.C. – The Treasury Department took a significant step on Thursday by announcing new sanctions on Iran as a response to its recent aerial attack against Israel. This move comes as the Biden administration chooses an economic approach over a military one in dealing with Tehran.

Treasury Secretary Janet L. Yellen emphasized that these actions are intended to disrupt and degrade the Iranian drone program that targeted civilian populations in Israel. The sanctions also extend to Iranian steel production, a measure not implemented by U.S. authorities since 2021. Over the past three years, the United States has imposed sanctions on more than 600 Iranian-related entities, according to the Treasury Department.

Yellen stated, “Our actions make it harder and costlier for Iran to continue its destabilizing behavior,” signaling that further actions will be taken in the coming days and weeks to counter Iran. The administration’s strategic approach with these new sanctions appears to be focused on taming tensions rather than escalating them in the region.

While some critics have urged the administration to go beyond and target China’s substantial purchases of Iranian oil to reduce revenue available to Iran’s government, the Treasury Department has taken some measures to sanction Chinese firms involved in such transactions. However, a comprehensive crackdown could potentially raise global oil prices and consequently impact U.S. gas prices.

The administration’s decision to primarily focus on targets within Iran with the latest sanctions indicates a deliberate effort to avoid further escalation for the time being. By cutting off these targets from financial institutions that use the U.S. dollar, the effectiveness of these sanctions remains to be seen, especially given the limited connections between the Iranian economy and Western economies.

Furthermore, even before the recent tensions stemming from the attacks on Israel, Iran’s economy has faced extensive sanctions over the years, with the United States imposing sanctions on the country since 1979. The Trump administration heightened economic pressures on Iran after withdrawing from the nuclear deal reached during the Obama administration in 2018.

The latest round of sanctions targets individuals and companies facilitating Iran’s drone production, as well as those providing materials to Iranian steel producer Khouzestan Steel Co. Additionally, Treasury is sanctioning subsidiaries of an Iranian automaker accused of supporting the regime. Iran’s response to the Israeli attack over the weekend with drones and missiles did not result in substantial damage or injuries due to interception efforts by Israeli, U.S., and other forces.