US announces expansion of sanctions in ‘economic onslaught’ againt Iran

WASHINGTON — The Trump administration has opened a new front in its campaign against Iran, warning countries, companies and financial institutions that continued dealings with Tehran could expose them to crippling US secondary sanctions.

Treasury Secretary Scott Bessent announced the escalation on Monday, describing it as an “economic D-Day” designed to sever the international financial and commercial networks that have helped Iran withstand years of American sanctions.

“We are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent said.

The initiative, formally branded Operation Economic Outcast, expands the sectors in which Washington can pursue secondary sanctions against entities maintaining business relationships with Iran. The newly targeted areas include digital assets, technology, gold, aviation and shipping. Nearly 60 companies, individuals and vessels linked to Iran’s oil trade, sanctions evasion, cyber operations and procurement networks were also targeted in the latest Treasury action.

The move represents a significant widening of the economic pressure campaign. Rather than focusing exclusively on Iranian entities, Washington is seeking to make Iran’s foreign commercial partners choose between maintaining access to the US financial system and continuing business with Tehran.

Bessent said the United States had spent months mapping the networks, intermediaries and financial channels Iran uses to move oil revenues and circumvent sanctions. Treasury officials are now working with American partners overseas to identify and disrupt what Washington considers sources of Iran’s “illicit revenue.”

China faces growing pressure

The most consequential test of the campaign could come in China, which remains Iran’s biggest customer for crude oil.

Washington has repeatedly targeted Iranian oil exports and the networks that transport and finance them, but it has so far been cautious about imposing the most severe penalties on major Chinese financial institutions involved in the trade.

Bessent, however, signalled that Beijing would not automatically be exempt.

“No one is above the reach of U.S. sanctions,” he said when asked whether Chinese banks facilitating Iranian oil purchases could eventually face action.

That threat carries significant geopolitical and economic risks. China is among the countries still maintaining substantial commercial links with Iran, meaning an aggressive enforcement campaign could push Washington into a direct confrontation with one of its largest trading partners.

Reuters reported that the administration's Monday announcement was principally a warning and expansion of its sanctions authority rather than an immediate blanket punishment of countries doing business with Iran. Bessent said foreign governments and companies would be given an opportunity to change their behaviour, although he stressed that Washington's patience was limited.

“We do not have infinite patience here,” Bessent said.

He also indicated that a major financial institution could be sanctioned before the end of the week, suggesting that the administration intends to move from warnings to enforcement quickly.

Economic pressure deepens as war enters sixth month

The sanctions offensive comes as the US-Iran war approaches its six-month mark, with diplomatic efforts to end the conflict having so far failed to produce a breakthrough.

Although the intensity of direct fighting has eased, the confrontation continues to disrupt energy markets and international shipping. The Strait of Hormuz remains at the centre of the crisis, with restrictions on shipping through the strategic waterway keeping pressure on oil and other commodity markets.

Iran's economic position has deteriorated sharply under the combined weight of military disruption, sanctions and restrictions on its oil exports. The Iranian rial fell to a record level of nearly 2 million to the US dollar on Monday, while shortages and long queues at petrol stations have emerged in parts of the country.

The United States says the economic pain is necessary to force Tehran to make concessions, including on its nuclear programme. Trump has maintained that preventing Iran from obtaining a nuclear weapon justifies the costs of the prolonged confrontation.

The economic fallout, however, is not confined to Iran. The disruption to energy flows through the Gulf has contributed to higher energy prices and increased uncertainty for businesses and consumers worldwide.

A sanctions system built around pressure — and evasion

Washington has imposed sanctions on Iran for decades, targeting sectors ranging from oil and aviation to cryptocurrency, military procurement and businesses linked to the Islamic Revolutionary Guard Corps.

The measures are intended to deny sanctioned entities access to the US dollar-based financial system, effectively making it difficult for them to conduct international transactions.

Iran, however, has repeatedly adapted. It has relied on front companies, intermediary businesses, alternative payment arrangements and frequently changing vessel registrations to keep trade moving despite American restrictions.

That history means the effectiveness of the latest campaign may depend less on the number of entities placed on sanctions lists than on whether Washington can persuade major trading partners to enforce the restrictions.

Reuters analysis noted that the new campaign could face its biggest challenge in countries such as China, which have continued trading with Iran despite previous US pressure.

From military pressure to economic isolation

The administration is increasingly presenting economic warfare as the next stage of its Iran strategy after months of military confrontation and stalled diplomacy.

Bessent has framed the operation as an effort to isolate Tehran completely, while the administration says the ultimate objective is to force Iran to reopen the Strait of Hormuz and bring the conflict to an end.

But sanctions specialists have questioned whether Monday's announcement represents the sweeping economic assault suggested by the “D-Day” rhetoric.

The immediate measures stopped short of the kind of major financial strikes on Chinese or other large foreign institutions that could fundamentally alter Iran's remaining access to the global economy.

That leaves the next phase of the campaign to enforcement.

For Washington, the calculation is straightforward: make the economic cost of doing business with Tehran so high that foreign companies and governments begin withdrawing voluntarily.

For Iran, the challenge is whether its established networks of intermediaries, alternative trade routes and foreign partners can continue keeping its economy alive under increasingly intense American pressure.

As Bessent put it, the US campaign will continue until Tehran is left standing alone.