On 25 October, Washington branded the Iranian Revolutionary Guard Corps a proliferator of weapons of mass destruction and its Quds force as a supporter of terrorism.
The US sanctions freeze the Iranian military’s assets in the US and ban Americans from doing business with its leaders.
In New York, West Texas Intermediate (WTI) oil hit $92.22 on the morning of 26 October and was at $91.60 in afternoon trading.
Brent oil surged to $88.41 a barrel in London, the highest since trading began in 1988.
The WTI price is nearing the inflation adjusted high of around $100 recorded in April 1980, following the start of the Iran-Iraq war.
Oil prices have now climbed almost 50 per cent since the start of 2007.
Meanwhile, the dollar has fallen against the euro on signs that rocketing oil prices and a housing slump are denting US consumer confidence.