US imposes new sanctions on Iran's central bank after drone attacks in Saudi Arabia

20 September 2019, 16:06 | Updated: 20 September 2019, 19:43

President Donald Trump says the US has imposed new sanctions on Iran's central bank following Tehran's alleged involvement in last weekend's drone and cruise missile attacks on Saudi oil facilities.

Speaking in the Oval Office during a meeting with Australian prime minister Scott Morrison, the US leader said: "We have just sanctioned the Iranian national bank."

Mr Trump said he expected the penalties to "work" on Iran and preferred that strategy to military action.

He said: "I think the sanctions work. The military would work. That's a very severe form of winning."

US Treasury Secretary Steven Mnuchin told reporters the bank was Tehran's last source of funds, saying: "We have now cut off all funds to Iran".

The president signalled he was not inclined to authorise a military strike on Iran in response to the country's suspected role in Saturday's attacks on the Khurais oil field and Abqaiq oil processing facility - which his secretary of state, Mike Pompeo, described as an "act of war".

Mr Trump said he believed showing restraint "shows far more strength" and he wanted to avoid an all-out war.

He said: "Well these are the strongest sanctions ever put on a country. We are at a level of sanction that is far greater than ever before with respect to Iran. Today we did central bank, as you know and we'll see, we'll see.

"They're having a lot of problems, not only with us, they're having problems within their own country and I think they have a lot of self-made problems."

Iran has denied any involvement in the 14 September attacks on the Saudi Aramco facilities, which shook global oil markets and further heightened tensions between Washington and Tehran.

It warned that any retaliatory strike on it by the US or the kingdom would lead to "an all-out war".

The US and Saudi Arabia have accused Iran of launching the attacks, which Yemen Houthi rebels earlier claimed as a response to the Saudi-led war there which has killed tens and thousands of people.

Saudi Arabia claims Iranian cruise missiles and drones were used to attack the kingdom's oil industry and showed journalists the remains of weapons at a news conference earlier this week.

While military spokesman Colonel Turki al-Malki did not directly accuse Iran of firing the weapons or launching them from inside Iranian territory, he told journalists: "The attack was launched from the north and was unquestionably sponsored by Iran".

On Friday, Lebanon's Hezbollah warned Saudi Arabia against betting on a war against Iran because it would destroy the country.

He urged Riyadh and the United Arab Emirates to halt the war in Yemen instead of buying more air defences.

In a televised speech, Hezbollah leader Sayyed Hassan Nasrallah said: "Your house is made of glass and your economy
is made of glass. Like the glass cities in the UAE".

The US has imposed multiple sanctions on Iran since the administration withdrew in November from the 2015 nuclear deal, with the latest sanctions demonstrating the US is continuing a maximum pressure campaign.