President Trump on Monday night issued an executive order to reinstate sanctions on Iran that were dropped following the 2015 nuclear deal, targeting critical sectors of the Iranian economy like petroleum. 

The sanctions are intended to put pressure on the Iranian economy by shutting down Tehran's ability to do business in US dollars and targeting areas like Iran's shipping and oil sectors.

The move follows the administration's decision in May to withdraw from the nuclear deal negotiated between Iran and world powers including the Obama administration.

International sanctions on Iran were lifted under the deal in exchange for curbs on Iran's pursuit of nuclear arms.

Trump's decision has opened a new rift with US allies in Europe, who are trying to salvage the nuclear deal and oppose new sanctions. The EU is telling companies not to comply with the US demand to stop doing business with Iran.

The executive order zeroes in on Iran's critical petroleum industry by, for example, punishing individuals who knowingly engage in, "a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran."

But even as the administration ramps up the economic pressure, it's also dangling the carrot of possible talks. with officials telling Reuters Trump is ready to meet with Iranian leaders at "any time" to negotiate a new nuclear deal.

Iranian President Hassan Rouhani dismissing the suggestion of talks with the US on Monday, saying they could only take place if Washington proved it was trustworthy.

Some of the new sanctions came into effect at midnight, with the rest kicking in on November 5.