The US is drawing up sanctions against companies that smuggle Iranian oil, according to a report

• The US government wants to crack down on Iranian oil smugglers, according to the Wall Street Journal.
• Iranian oil reportedly trades at a $10 a barrel discount to Brent crude, which has seen its price soar since Russia invaded Ukraine.

The US government is working on a new package of sanctions against anyone that smuggles Iranian oil, according to the Wall Street Journal.

The sanctions would reportedly target companies and individuals that forge documents to pass Iranian oil off as an Iraqi crude blend.

This would be the third time the US government has sanctioned Iranian oil since nuclear deal talks between the two countries stalled earlier this year.

Former US president Donald Trump pulled the US out of its nuclear agreement with Iran back in 2018, under which Iran was able to export oil, but Joe Biden has made restoring it a foreign policy priority.

Tehran had also previously slashed its sanctioned oil prices to compete with steep Russian discounts.

Iranian oil is now priced $10 a barrel below global benchmarks such as Brent futures, commodities traders said last month - which represents a $5 to $6 a barrel price cut since Russia invaded Ukraine in February. Russian crude trades at a discount of closer to $30 to Brent.

Iran has the capacity to produce over 3.5 million barrels per day of crude oil, but since the re-imposition of sanctions in 2018, output is closer to 2.4 million, according to the Organization of the Petroleum Exporting Countries.

Crude prices have soared this year due to Russia's invasion and an inflationary commodities supercycle. Brent crude has rallied 30% to over $102 a barrel, while WTI crude is up 27% to above $96 a barrel.

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