Iran warned on Friday that any fresh US threats would be met with a “devastating” response, after Washington vowed to unleash what it called the toughest financial penalties in history in a bid to bring down Iran’s leadership.
US Treasury chief Scott Bessent said he will lay out details on Monday of the sanctions plan, which follows President Donald Trump’s warning of economic consequences for any country offering “any type of lifeline to Iran”.
Iran’s Armed Forces chief of staff, Major General Ali Abdollahi, said the Islamic Republic was prepared to answer on multiple fronts and would not limit its reaction.
“With preparedness across land, sea, air, air defence and cyberspace, Iran’s armed forces will respond to the enemy’s new threats with crushing, punishing and devastating responses,” Mr Abdollahi was quoted as saying by Iranian media.
In parallel, Iran’s parliament speaker Mohammad Baqer Qalibaf — the country’s main negotiator in mediated talks with the United States — said Washington appeared to have realised it could not succeed through direct military confrontation.
“We must make plans to deal with the unjust sanctions so that we can overcome them,” he said during a visit to neighbouring Iraq, accusing the US and Israel of waging what he described as economic and “cognitive” warfare.
US Treasury chief Scott Bessent is to outline details of the US response next Monday
Bessent says measures should not impact oil prices
Oil prices were steady today but remained on course for a second straight weekly rise, as traders watched Gulf energy exports amid mounting anxiety over supply disruptions.
Crude climbed to a more than three-week high on Thursday after the sanctions threat, which is intended to pressure Iran into agreeing to an end to a conflict that has left millions of barrels of Middle Eastern oil stranded.
“I’m not sure why oil has popped up on this,” Mr Bessent told CNBC. “If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he said, using a term referring to military force.
Traffic through the Strait of Hormuz has thinned sharply. Just seven commodity ships sailed along the route on Thursday — about half the previous day’s tally — shiptracker Kpler data showed, compared with more than 130 a day before the war.
The war has killed thousands, pulled in Gulf nations and driven up global fuel prices after Iran attacked shipping through the Strait of Hormuz, which before February carried about a fifth of all traded oil.
The United States and Iran have twice announced ceasefire deals — in April and June — aimed at restoring the free flow of vessels through Hormuz as part of a path toward ending the nearly six-month-old conflict, but both agreements quickly fell apart.
Before Mr Bessent’s interview, Iran’s foreign ministry said US sanctions would not “create even the slightest hesitation in Iranians’ determination to safeguard Iran’s independence, dignity and national sovereignty”.
Mr Bessent told CNBC he would “talk about exactly what we’re going to do” on Iran at a press conference on Monday.
“We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” he said, describing a naval blockade reimposed on Iran in July and the “toughest sanctions in history” as a “one-two punch”.
Iran has endured nearly 50 years of heavy economic sanctions since the 1979 Islamic Revolution, yet ordinary Iranians have been squeezed by high inflation, a weakening currency and energy shortages, alongside damaged infrastructure.
Some Iranians interviewed by Reuters said additional economic pressure could deepen hardship, erode support for the clerical establishment and trigger unrest, though there has been no sign of that since a deadly crackdown on protests in January.
Mr Trump is also under growing pressure at home to end the war, with high fuel prices weighing on his approval ratings and potentially putting Republican control of Congress at risk in November’s midterm elections.
Oil prices hit a three-week high on Thursday
US blockade starts reducing oil flow to China
Trade sources told Reuters that offers of Iranian crude to Chinese buyers have already fallen since the US reinstated its blockade on Iranian ports in mid-July.
China purchases more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler. But escalating US economic warfare with Beijing — which has eased earlier limits on exports of key rare-earth minerals — carries the risk of retaliation.
Asked whether Washington could target China over business with Iran, Mr Bessent said some discussions were better conducted behind closed doors.
“Keep in mind that the Chinese get 50% (of their) energy… from the Gulf. So it would do them a big service to get with the program,” he said.
China’s embassy in Washington said “sanctions and pressure do not help resolve the problem”, urging a diplomatic approach.
Further tightening also raises risks for US allies in the Gulf, particularly as energy infrastructure and desalination plants — critical for drinking water — have come under Iranian attack.
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Hezbollah says new US sanctions ‘will not deter us’
Hezbollah said the United States “will not deter” its resistance against Israel after Washington announced new sanctions on the group, arguing it operates on behalf of Iran.
On Thursday, the US Treasury Department amended Hezbollah’s legal designation to state that it acted in “service to the Iranian regime under the command of Iran’s Islamic Revolutionary Guard Corps”.
The department also announced new sanctions against 10 people who are allegedly part of a network that transfers cash to Hezbollah.
“All these unjust sanctions and classifications will not deter us from adhering to the path of resistance and the right of Lebanon and the Lebanese to defend their land, sovereignty and resources,” Hezbollah said in a statement.
The Iran-armed and funded group said it “does not need anyone to vouch for its Lebanese identity and patriotism”.
“Our close and fraternal relationship with the Islamic Republic of Iran is a relationship we cherish and are proud of,” it added.
In its statement, the Treasury said Hezbollah relies on a network that uses “couriers travelling on commercial airline flights between Lebanon, Turkey, the UAE, and Iran to move up to hundreds of millions of dollars between jurisdictions” to evade sanctions.
Washington first designated Hezbollah a “foreign terrorist organisation” in 1997, then in 2001 updated its status to a “specially designated global terrorist” group.
A US State Department official, speaking on condition of anonymity, said the US had for years “documented the operational, financial, and logistical integration” between Hezbollah and the Quds force, the foreign operations arm of the IRGC.
Hezbollah, the official said, was simply “an extension” of the Quds force and “not a Lebanese resistance movement”.
Hezbollah said the latest US move was designed “to target the resistance, its community, its environment, and its supporters, and to besiege and pressure them” in order to protect Israel.
The new US decision comes as Washington facilitates direct negotiations between Israel and Lebanon — which have technically been at war for decades — aimed at ending hostilities that began when Hezbollah drew Lebanon into the wider Middle East conflict by firing rockets at Israel in support of Iran.
Israel responded with a heavy air campaign and a ground invasion that Lebanese authorities say have killed more than 4,300 people.
In June, Lebanon and Israel signed a framework agreement calling for Hezbollah’s disarmament, a gradual Israeli withdrawal from south Lebanon and the deployment of the Lebanese army to the area, beginning in “pilot zones”.
