Iran has vowed to strike back after Washington rolled out expanded economic sanctions that US officials say are designed to choke off what they describe as Tehran’s remaining financial lifelines.
Even as it warned of retaliation, Tehran signalled it believes key trading partners will not fall in line with the US pressure campaign.
US Treasury Secretary Scott Bessent announced the new measures yesterday, but held back from the toughest possible penalties, warning instead that countries that keep doing business with Iran could find themselves pushed out of the dollar-based financial system.
“Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Mr Bessent told a press conference.
Mr Bessent refused to name which countries would face action or to specify when any such penalties would begin, saying he would allow time for them to comply with the new directive.
US Treasury Secretary Scott Bessent speaking at a press conference in Washington, DC
The Treasury Department did, however, announce sanctions on 60 individuals, entities and vessels. The list notably did not include any Chinese financial institutions that have been suspected of enabling Iran’s oil trade.
Pressed on whether Chinese banks handling Iran-related transactions could still be sanctioned, Mr Bessent said “no one is above the reach of US sanctions”.
Before the US announcement, Iran had threatened both a possible military response and a further reduction in oil exports from the Gulf if Washington moved ahead with additional economic measures.
After the sanctions were unveiled, Iranian Economy Minister Ali Madanizadeh said, “we are fully prepared for the US sanctions”.
“Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know-how to play the game. Our defence is no longer so defensive, the enemies should wait for an attack,” Mr Madanizadeh added.
He also said that neither China nor Russia had “accepted” the US measures and predicted that other countries would resist them.
China has been the largest buyer of Iranian oil for several years
Brigadier General Hossein Mohebbi, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, vowed heavy blows to US vital interests and energy chokepoints if Iran’s infrastructure is threatened, according to local news reports.
Neither side has launched major strikes in weeks, with the war showing little sign of reaching a diplomatic solution.
As the standoff drags on, the US has been looking for additional ways to halt Iranian attacks on ships in the Gulf and, more recently, via its allies, in the Red Sea.
Chinese oil trade
Despite yesterday’s announcements, oil prices dropped by more than $2 (€1.71) a barrel, even as investors weighed the possibility of fresh supply disruptions from the Middle East.
Asked why he held back from imposing harsher penalties on Iran and why he would not identify the countries that could be targeted, Mr Bessent replied, “why would I want to blow up the global financial system”?
He said his approach was intended to give countries and companies time to cut ties.
US President Donald Trump pictured with China’s President Xi Jinping in Beijing on 14 May
Mr Bessent has previously sought cooperation from China, which has been the biggest buyer of Iranian oil for several years. But the US blockade of Iran’s ports, renewed in mid-July, has already reduced Iranian oil flows to China.
China’s Foreign Ministry said sanctions and pressure tactics do not help, adding that Beijing would do what was necessary to safeguard China’s interests.
The exchanges come ahead of expected talks next month between President Donald Trump and Chinese President Xi Jinping.
