Treasury Secretary Steven Mnuchin on June 24 had said Zarif would be blacklisted that week.
Zarif is seen as the architect of a multilateral nuclear deal, which the Trump administration abruptly abandoned last year. The US reinstated its unilateral sanctions against the Islamic Republic following its exit from the landmark deal.
Blacklisting Iran’s chief negotiator would also be unusual because it could impede any US effort to use diplomacy to resolve its disagreements with Tehran over Iran, Reuters reported.
The sources did not give specific reasons for the decision, which came after two months in which US-Iranian tensions have soared following the US withdrawal from the 2015 nuclear agreement and its recent military deployment in the Persian Gulf.
“Cooler heads prevailed. We ... saw it as not necessarily helpful,” said one source familiar with the matter who spoke on condition of anonymity, saying US Secretary of State Mike Pompeo had opposed designating Zarif “for the time being.”
In a sign of how close Washington came to taking action, the US Treasury internally circulated a draft press release announcing sanctions on the Iranian foreign minister.
Zarif is expected to attend a ministerial meeting at the United Nations next week on sustainable development goals, which aim to tackle issues including conflict, hunger, gender equality and climate change by 2030.
To do so, the United States would have to grant him a visa, another sign Washington is holding off on sanctions for now.
Relations have deteriorated since US President Donald Trump last year unilaterally withdrew from Iran’s 2015 nuclear deal with major powers, and his early May decision to use US sanctions to try to eliminate Iran’s oil exports entirely.