US imposes new sanctions on Hamas amid concerns conflict could hit oil supply

The US Treasury imposed new sanctions on individuals involved in financing Hamas Oct. 27 amid concerns that Iran could face new sanctions and infrastructure in the region may be damaged, as a result of the war between Israel and Hamas.

On Oct. 27, the US Treasury announced new sanctions on Hamas' investment portfolio and individuals facilitating sanctions evasion, including some Iranian nationals.

Deputy secretary of the Treasury Wally Adeyemo said that Hamas, similarly to Russia, has found ways to remain connected to the international financial system.

"Let me be clear, we will use every tool available to go after any person or platform that is facilitating the movement of resources for terrorists," Adeyemo said at an event in London.

Sanctioning countries face a challenge managing the balance between economic restrictions on key oil producers Iran, Venezuela and Russia, without causing supply and price shocks.

Between Russia's invasion of Ukraine in February 2022 and the Hamas attack on Israel on Oct. 7, Iran and Venezuela increased crude oil production, but analysts now see risks of a change in the approach to Iran's oil sector.

Dialog on sanctions has increased since the war between Israel and Hamas began.

Adeyemo said that the Executive Committee of the Terrorist Financing Targeting Center (TFTC) held an urgent meeting in Riyadh earlier this week. In addition to meetings in London, Adeyemo plans to discuss disrupting Hamas' activity with EU officials later this week.

In recent weeks, crude prices have responded to the conflict in the Middle East. Platts, part of S&P Global Commodity Insights, assessed Dated Brent at $91.36/b on Oct. 9, up from $88.20/b on Oct. 6. It hit a post-attack peak of $95/b on Oct. 20, but was down to $89.70/b on Oct. 26.

Adeyemo said that the US response to the Hamas attack is focused on three key areas -- increasing financial sanctions, increasing information sharing with partners, and engaging with stakeholders, including financial institutions, to prevent illicit financial flows.

He added that, overall, the US has targeted nearly 1,000 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies, including Hamas, Hizballah, and other Iran-aligned militant groups in the region.

The conflict continues to pose risks of damage to key infrastructure, including as a result of attacks on US forces in the Middle East which have increased in recent days, according to the Pentagon.

"If attacks continue -- and especially if they expand -- then the possibility of oil-related infrastructure, including tankers, getting targeted or inadvertently damaged will increase," S&P Global analysts said Oct. 25.