Washington is preparing what Treasury Secretary Scott Bessent called “the toughest sanctions in history” on Iran, a move he framed as an escalation in economic pressure that could reduce the likelihood of fresh large-scale US military action against Tehran.
Bessent’s comments came a day after President Donald Trump threatened “Economic Warfare,” warning that any country offering “any type of lifeline to Iran” would face consequences.
Markets reacted quickly. Oil prices climbed to more than a three-week high after the US warnings of financial penalties, as investors weighed efforts to force an end to a nearly six-month-old war that has stranded millions of barrels of Middle Eastern oil.
“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.
— The White House (@WhiteHouse) August 19, 2026
Iran calls US sanctions ‘economic terrorism’
The conflict has killed thousands, drawn in Gulf nations and jolted global markets as Iran demonstrated its ability to restrict shipping through the Strait of Hormuz — a corridor that carried about a fifth of all traded oil before February.
Washington and Tehran have twice declared ceasefire arrangements — in April and June — designed to restore the free flow of shipping through Hormuz and set a course toward ending the conflict. Both deals, however, quickly unravelled.
Before Mr Bessent spoke, Iran’s foreign ministry condemned US economic and trade sanctions, branding them “economic terrorism” that would harm ordinary Iranians and amount to crimes against humanity.
Mr Bessent said he planned to provide more information at a press conference on Monday, promising to “talk about exactly what we’re going to do” on Iran.
“It is a one-two punch. We have the blockade (on Iran), and we are going to have the toughest sanctions in history,” he said, referring to a US naval blockade imposed on Iran in April and paused for a month in mid-June.
“It is going to work in Iran and 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.
US Treasury Secretary Scott Bessent described the sanctions as the ‘toughest in history’
Pressed on whether the United States could target China for doing business with Iran, Mr Bessent said some discussions were better handled away from cameras.
“Keep in mind that the Chinese get 50% (of their) energy from inside from the Gulf. So it would do them a big service to get with the programme,” he said.
China purchases more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler. But stepping up economic warfare with China — a major exporter to the US, including vital rare-earth minerals — carries the risk of retaliation against Washington.
In a social media post yesterday, Mr Trump pledged “Economic Warfare and Isolation on an unprecedented scale,” though he offered few specifics.
After war broke out between the US and Iran in February, Tehran effectively shut the Strait of Hormuz
Iran has endured sweeping economic sanctions for nearly 50 years, dating back to the Islamic Revolution of 1979.
“ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” Mr Trump wrote.
Iranian Foreign Minister Abbas Araqchi said Mr Trump was trying to steer American public attention away from domestic financial strains, including record debt and rising interest rates.
He said Washington’s continued pursuit of what he described as failed policies would only produce more failures and further alienate Iranians.
“America’s economic terrorism threatens the global economy and the national sovereignty of countries around the world,” he said on X.
Mr Trump has not yet met the goals he set at the outset of the war: dismantling Iran’s nuclear programme, limiting its ability to strike regional rivals and creating conditions for Iranians to topple their clerical leaders.
Mr Trump’s social media threats and announcements do not always get implemented as written.
He did not spell out which measures the US might take or identify any country by name, though the warning appeared broad enough to include US allies involved in peace efforts.
Iran’s Parliament Speaker Mohammad Bagher Ghalibaf meeting Iraq’s Prime Minister Ali al-Zaidi
Separately, Iran has been negotiating with Oman on an agreement to manage the Strait of Hormuz, and in recent weeks has repeatedly said a deal was close.
Mr Trump reacted on Monday with a threat directed at those talks, warning he might bomb the Gulf state — a longstanding US security partner — if it “gets in the way”.
Omani Foreign Minister Badr Albusaidi, speaking after meeting his Japanese counterpart, said lasting security in the strait depended on a permanent peace in the region and rejected further escalation.
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