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

According to the Wall Street Journal, a new package of sanctions is being worked on by the US government.

Companies and individuals that pass Iranian oil off as Iraqi crude would be targeted by the sanctions.

This would be the third time that the US government has imposed sanctions on Iran.

After Donald Trump pulled the US out of the nuclear agreement with Iran, Joe Biden made restoring it a priority.

Iran slashed its oil prices in order to compete with Russia.

Commodity traders said last month that the price of Iranian oil has fallen to $10 a barrel below global benchmark prices. The price of Russian crude is closer to $30 a barrel.

Iran has the ability to produce over 3.5 million barrels of crude oil per day, but since the re-imposition of sanctions, output is closer to 2 million.

Russia's invasion and an inflationary commodities supercycle have caused the price of crude to soar this year. West Texas Intermediate crude is up 27% to above $96 a barrel.

Goldman says that oil will hit $140 a barrel.