The United States has announced new sanctions targeting Iran’s oil sales linked to its military forces. The U.S. Department of the Treasury made the announcement on Thursday, stating that the restrictions apply to oil sales conducted by Iran’s armed forces. A U.S. official said Tehran and Washington have reached a draft agreement to extend a ceasefire and begin nuclear discussions.

According to the Treasury, the sanctions are part of ongoing economic pressure initiated under the Trump administration to compel Iran to meet U.S. demands. Despite decades of sanctions imposed by both Republican and Democratic administrations, the measures have yielded limited results. The new restrictions specifically target Sepehr Energy Jahan, a branch of Iran’s armed forces that exports millions of barrels of crude oil to China.

In a press release, the Treasury claimed that Iran’s military uses oil revenues obtained through anonymous companies to fund its reconstruction efforts and to threaten neighboring countries.