In brief
- The US will impose sanctions on Iran as the war between the two nations continues.
- Countries that continued to trade with Iran could also become the subject of US sanctions.
United States treasury secretary Scott Bessent has laid out plans for the “economic asphyxiation” of Iran, expanding the US’ secondary sanctions threats and warning of dire consequences for countries that do not join the campaign.
The announcement on Tuesday came almost six months into a war on Iran that has ground to a stalemate, with stalled peace talks and Iran blocking most traffic through the crucial Strait of Hormuz.
Bessent earlier said the US was declaring an “economic D-Day” on Iran, but his announcement named no specific countries beyond Iran and gave no timelines.
“Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent told journalists.
“We are going to hold everyone accountable, and this is economic asphyxiation of this regime.”
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He added that countries not joining US sanctions would “share in the isolation” of Iran, and noted that US President Donald Trump was making phone calls to world leaders requesting they stop interactions with Iran.
The US treasury department said expanded secondary sanctions would target Iran’s digital assets, technology, gold, aviation and shipping sectors.
It also issued new sanctions against 60 individuals, companies and vessels that allegedly aid Iran in oil revenue generation, weapons procurement and cyber operations.
The sanctions hit entities around the world, including in the United Arab Emirates, Hong Kong, China, Singapore and in Europe.
Bessent vowed that any entity “that facilitates money laundering on behalf of Iran will be removed from the US dollar system”.
Iran had been dismissive of the threat of additional sanctions, and on Tuesday its economy minister predicted “another defeat” for the US on the economic front.
“We’ve been waiting for these plans for a long time, and the government is and was ready and has a two-year plan to manage these events,” Ali Madanizadeh said.
In a post before the announcement, Iran’s deputy foreign minister Kazem Gharibabadi said the latest US threats were an admission of military defeat.
Gharibabadi asked why, if the US had achieved its goals, “there is a need for ‘the largest financial invasion in history’ and the mobilization of ‘all institutions and powers’ of the United States!
“Is this a victory or an admission of America’s defeat?”
Decades of sanctions
Iran has weathered decades of crushing international sanctions, and before the war it continued to export millions of barrels of oil, mostly to China, and to evade sanctions through complex international financial networks.
Asked on Tuesday if Chinese banks would be targeted by the new sanctions, Bessent said “no one is above the reach of US sanctions”.
The US naval blockade of Iran has seen its oil exports via the Strait of Hormuz fall from two million barrels a day pre-war to just 0.4 million by mid-August, according to maritime tracker Kpler.
For ordinary Iranians, the standoff is likely to bring only more economic pain after years of rampant inflation, which in December and January fuelled massive anti-government protests.
Sarah Hassanbeigi, a 32-year-old pharmacist in Tehran, said: “I don’t think people can really take this much longer.”
The US announcement on Tuesday also suspended sanctions exemptions for payments to and from Iran related to the US educational system.
Pakistani delegation
Last week, Iranian President Masoud Pezeshkian, considered a relative moderate, said Iran should “bring the war to an end now as we are in a position of power”.
That followed Supreme Leader Mojtaba Khamenei appointing hardliners to key security positions.
On Monday, Pakistan’s army chief Asim Munir — a key mediator in the conflict — visited Iran and met separately with Iran’s president, chief negotiator and the head of its highest national security body.
The meetings took place after Trump spoke last week with Munir, a US source familiar with the matter told the Agence France-Presse news agency earlier on Monday.
Pakistan was a leading mediator in talks that helped secure an April ceasefire that later fell apart. It is also a major trading partner of Iran, possibly opening it up to the threat of the new sanctions.
Oman’s foreign minister was due in Iran on Tuesday, as the two countries seek a deal on regulating passage through Hormuz.
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