President Donald Trump on Friday announced new sanctions on Iran's central bank, calling the measures the toughest ever imposed on another country by the United States.
"We have just sanctioned the Iranian national bank," Trump told reporters in the Oval Office.
"These are the highest sanctions ever imposed on a country," he said.
The Trump administration has vowed a response after US officials blamed Iran for weekend blasts on Saudi Arabia's oil infrastructure, which caused a sharp hike in global crude prices.
The United States already maintains sweeping sanctions on Iran including on its central bank, with anyone who deals with it subject to prosecution.
Elaborating on Trump's remarks, the Treasury Department said it was authorizing sanctions on the central bank not only over Iran's alleged nuclear work but for "terrorism."
Such a designation may be more difficult to lift, even if Trump loses next year's election to a Democrat who wants to ease sanctions as part of a future deal.
"Iran's brazen attack against Saudi Arabia is unacceptable," Treasury Secretary Steven Mnuchin said in a statement.
"Treasury's action targets a crucial funding mechanism that the Iranian regime uses to support its terrorist network, including the Qods Force, Hezbollah and other militants that spread terror and destabilize the region," he said.
The Qods Force conducts international operations for Iran's elite Revolutionary Guards, who are in charge of protecting the clerical regime.
Hezbollah, the Shiite militant group and political party in Lebanon, is among Iran's closest regional partners.
The Treasury Department said that the Iranian central bank has provided "billions of dollars" to the two units, which were both previously designated as terrorists by Washington.
The United States also imposed sanctions on Iran's sovereign wealth fund, whose board of trustees include President Hassan Rouhani, as well as Etemad Tejarate Pars, a company that the Treasury Department said had sent money internationally on behalf of Iran's defense ministry.
Trump in June authorised a military strike after Iran shot down a US drone, only to call it off at the last moment.
He recently said that he hopes for talks with Rouhani, which responded that Trump must first ease sanctions.
Trump last year pulled out of a nuclear accord with Iran negotiated under former president Barack Obama, sending tensions soaring as he tried to stop all countries from buying Iran's oil.