(BBC) US President Donald Trump has said he is imposing hard-hitting new sanctions on Iran, including on the office of the country’s Supreme Leader Ali Khamenei.
Mr Trump said the additional sanctions were in response to the shooting down of a US drone and “many other things”.
Ayatollah Khamenei, Iran’s highest authority, was singled out because he was “ultimately responsible for the hostile conduct of the regime”.
Tensions between the two countries have been escalating in recent weeks.
However, US Treasury Secretary Steve Mnuchin said Mr Trump’s executive order – which would lock up “billions” of dollars in Iranian assets – was in the works before Tehran shot down an unmanned US drone in the Gulf last week.
How have earlier US sanctions hit Iran?
Iran is already feeling the burden after the US reinstated sanctions last year when it pulled out of a 2015 nuclear deal.
The sanctions – particularly those imposed on the energy, shipping and financial sectors – caused foreign investment to dry up and hit oil exports.
They bar US companies from trading with Iran, but also with foreign firms or countries that are dealing with Iran.
This has led to shortages of imported goods and products that are made with raw materials from abroad, most notably babies’ nappies.
The plunging value of the national currency, the rial, has also affected the cost of locally produced staples such as meat and eggs, which have soared in price.
Iran has responded to the economic pressure by violating some of the nuclear deal’s commitments. It has also accused European countries of failing to live up to their promises of protecting Iran’s economy from US sanctions.
What happened to the US drone?
Iran’s IRGC said the drone’s downing was a “clear message” to the US that Iran’s borders were “our red line”.
But US military officials maintain the drone was in international airspace over the Strait of Hormuz at the time.
Amir Ali Hajizadeh, a high-ranking officer in the IRGC, said another military aircraft, carrying 35 passengers, had been flying close to the drone. “We could have shot down that one too, but we did not,” he said.
