The sanctions end all the economic benefits America granted Tehran for its 2015 nuclear deal with world powers, though Iran continues to abide by the accord that saw it limit its enrichment of uranium.
While, for now, the country is not threatening to resume higher enrichment, Iranian officials in recent months have made a point that the process could resume at any time faster than before.
Enriched uranium is a crucial component of civil nuclear power generation and most nuclear weaponry.
The new American sanctions particularly hurt Iran’s vital oil industry, a crucial source of hard currency for its anaemic economy.
Its national currency has plummeted over the last year, sending prices for everything, from mobile phones to medicine, sky high.
“Today, Iran is able to sell its oil and it will sell,” Rouhani vowed Monday as the sanctions kicked in.
On Friday, US President Donald Trump promoted the then-upcoming sanctions with a ‘Game Of Thrones’-themed meme, since condemned by the show’s stars and broadcaster HBO.
What Are The Iran Sanctions?
The sanctions, removed in 2015 with the signing of the Iran nuclear deal but now re-introduced by President Trump, target the country’s oil sector, which dominates the economy there.
They seek to limit Iran’s ability to export oil, essentially by excluding companies which trade Iranian oil from doing business in the US.
Further sanctions will also affect the Iranian banking sector, adding to strict rules imposed on the trade of gold, metals and car parts.
Secondary sanctions also mean that any US company doing business with a company that trades with Iran could face punishment.
The US has, however, allowed several of its allies to continue importing Iranian oil.
These include Italy, India, Japan and South Korea, along with Turkey, China and India, the BBC reported.
But the sanctions will not affect Iran’s trade with the rest of the world. The European Union, for example, has implemented a special system for payments that allows companies to dodge the US measures.
Nonetheless, President Trump said: “We’ll see what happens with Iran, but they’re not doing very well, I can tell you.”
While Secretary of State Mike Pompeo claimed the re-imposed sanctions were “the toughest ever placed” against Iran.
It comes as Iranian state television aired footage of air defence systems and anti-aircraft batteries in two-day military manoeuvres underway across a vast stretch of the country’s north.
The drill was to continue through Tuesday. An Iranian army general, Habibillah Sayyari, said both the national army and the country’s paramilitary Revolutionary Guard were taking part in the exercise.
Rouhani, meanwhile, pledged to government officials in comments aired on state TV that Iran would overcome the sanctions.
“We are in the war situation, ” Rouhani said. “We are in the economic war situation. We are confronting a bullying enemy. We have to stand to win.”
Iran is already in the grip of an economic crisis. Its national currency, the rial, now trades at 145,000 to one US dollar (£0.77), down from when it traded 40,500 to $1 a year ago. The economic chaos sparked mass anti-government protests at the end of last year which resulted in nearly 5,000 reported arrests and at least 25 people being killed. Sporadic demonstrations still continue.
The United States says the sanctions are not aimed at toppling the government, but at persuading it to radically change its policies, including its support for regional militant groups and its development of long-range ballistic missiles.
However, President Donald Trump’s personal lawyer Rudy Giuliani and the president’s national security adviser, John Bolton, have both made public statements supporting the overthrowing of Iran’s theocratic government.
With reporting from the Associated Press.