U.S. eyeing Iran's central bank as chief target for new sanctions

Such sanctions would aim to isolate the Bank Markazi, or central bank, from the world economic system by barring any firm that deals with it from doing business with U.S. financial institutions. That would make it far more difficult for Iran to sell crude oil, which funds much of the government’s activities.

Some Iranian officials have warned that they would look on such a move as an act of war.

The sanctions would probably be effective, however, only if other world powers joined in. And the administration would have to overcome arguments that the action would harm ordinary Iranians and damage the oil markets.

Cohen, who is in charge of U.S. sanctions on Iran, told the committee that if other countries joined in the blacklisting, it “could further isolate the central bank of Iran, with a potentially powerful impact on Iran.”