Secretary of
State Mike Pompeo has warned that the US will exert "relentless"
pressure on Iran unless it changes its "revolutionary course".
His comments
came hours after the Trump administration restored all sanctions lifted under
the 2015 nuclear deal, targeting core parts of Iran's economy.
Iran's
President Hassan Rouhani earlier struck a defiant tone, saying the country will
"continue selling oil".
"We
will proudly break the sanctions," he told economic officials.
Mr Pompeo
told reporters: "The Iranian regime has a choice: it can either do a
180-degree turn from its outlaw course of action and act like a normal country,
or it can see its economy crumble."
He said more
than 20 nations had already cut their oil intake from the Islamic Republic, and
its exports had fallen by a million barrels a day.
European
countries which are still party to the 2015 accord have said they will help
businesses bypass the sanctions. But there are doubts about how successful this
will be.
How did we
get here?
US President
Donald Trump withdrew the US from the nuclear accord earlier this year, calling
it the "worst deal ever negotiated".
The
agreement offered Iran sanctions relief in exchange for reducing its nuclear
development. The global nuclear watchdog, the IAEA, says Iran has complied with
it.
President
Trump has said he wants to get Iran back to the negotiating table.
His
administration also wants to stop what it calls Tehran's "malign"
activities - including cyber attacks, ballistic missile tests, and support for
terror groups and militias in the Middle East.
The
president believes his "maximum pressure" strategy is working, but
said on Monday that he wants to impose sanctions gradually to prevent a spike
in energy prices.
"I
could get the Iran oil down to zero immediately," he told journalists,
"but it would cause a shock to the market. I don't want to lift oil
prices."
The US state
department said that three civil nuclear projects set up in Iran through the
2015 deal would be allowed to continue, "under the strictest
scrutiny".
It said
"temporary" waivers had been granted, without giving a timeframe.
Why does the
US claim Iran is the 'world's largest state sponsor of terrorism'?
The US and
Iran have been arch-foes since the Islamic revolution in 1979.
Since then,
Iran has provided arms and financial support to militant groups active in the
Middle East and further afield.
Some of
these groups, such as Lebanon's Hezbollah, have carried out devastating
attacks, including on a military barracks in Beirut in 1983, which killed 241
US service personnel and 58 French paratroopers. Iran denied being behind that
attack.
The US has
also accused Iran of direct involvement in plotting or carrying out attacks -
from bombings to assassinations.
According to
a report by the US State Department, since 2012, Iran has spent $16bn on proxy
groups in the region as well as support for Syrian President Bashar al-Assad.
Iran accepts
neither the US allegations, nor its designation as an exporter of terror.
What could
the sanctions' impact be?
The US
reinstated a raft of sanctions in August, but analysts say this latest round is
by far the most significant.
More than
700 individuals, entities, vessels and aircraft are now on the sanctions list,
including major banks, oil exporters and shipping companies.
The
Brussels-based Swift network for making international payments has confirmed it
will cut off links with some Iranian banks, isolating Iran from the international
financial system.
However, the
Trump administration has granted temporary exemptions to eight countries to
continue importing Iranian oil - China, India, Italy, Greece, Japan, South
Korea, Taiwan and Turkey.
This is
significant as China and India are among Iran's largest trading partners.
Even before
the US sanctions were reimposed, Iran's economy had had a difficult year, with
its currency, the rial, plummeting against the dollar, driving up the price of
basic goods.
Mr Trump's
national security adviser John Bolton announced on Monday that even more
measures could follow soon.
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