The price of oil has shot up since an attack on a Japanese tanker called the Kokuka Courageous.
The Americans claim that Iranian forces planted a mine on the ship when it was it was passing through a narrow strait in the Arabian Gulf.
A ship from Norway was also attacked.
This was a huge shock because at the time, Japan’s Prime Minister Shinzo Abe was in Tehran, trying to calm down tensions been Iran and the US.
Threat of conflict
That clearly did not work, as a few days later the Iranians shot down an unarmed US drone – nearly provoking a missile strike in revenge.
The US is increasing its troop presence in the region and there has even been talk of war.
Japan is one of a number of Asian countries with close economic ties to Iran, even though the two nations have nothing in common politically.
The US has been trying to prevent other countries from buying any oil from Iran through sanctions and this has caused a major blow to the Iranian economy.
Amrita Sen from Energy Aspects told the BBC: “Exports of oil from Iran have almost ground to zero except for a few thousand barrels being smuggled into Syria. Previously Iran used to sell a lot of oil to Japan, China, Korea, India and Turkey but since this spring, the Americans have clamped down on their sales to other markets.”
President Trump has now extended the sanctions to target high ranking individuals.
“The supreme leader of Iran is one who ultimately is responsible for the hostile conduct of the regime. His office oversees the regime’s most brutal instruments, including the Islamic Revolution Guards Corps,” he told reporters in the Oval Office.
President Rouhani said the sanctions targeting Ayatollah Khamenei were “outrageous and idiotic”.
The BBC reported that in a televised address, he said: “The US wants to confiscate the leader’s property. The leader owns a Hoseyniyyeh [prayer venue] and a simple house. Our leaders are not like the leaders of other countries who have billions of money on foreign accounts that you could appropriate.”
The Iranians have also been trying to smooth things over in Tokyo. The Japan Times covered a press conference by the Iranian ambassador who flatly denied that his country had attacked the Japanese tanker.
Rahmani Movahed praised Mr Abe’s visit to Tehran, saying that Japan can play a major role in promoting peace and stability in the Persian Gulf.
“We consider Prime Minister Abe’s visit as a success,” he said.
That’s not a view shared by any of the mainstream media in Japan who see the situation as a mess.
Mr Abe will no doubt be hoping that President Trump stays friendly with Japan but doesn’t lash out at Iran in a way which causes instability in the region or threatens Japan’s supply of energy.