Iran has threatened to wage an “economic war” against the US as tension between the two countries escalates, but experts say Tehran has few conventional economic weapons capable of directly hurting the world’s largest economy.
Mohsen Rezaei, the secretary of Iran's Supreme National Security Council, issued dual economic and military threats on X on Tuesday, stating that US economic warfare will be met by maritime exclusion zones.
This follows an exchange of US-Iran vessel attacks and US Treasury Secretary Scott Bessent's remarks last month about launching an “economic D-Day”, or an “economic onslaught” against Iran dubbed “Operation Economic Outcast”.
Despite Iran's claims of fighting back, experts say their financial arsenal is limited.
“Iran's ability for economic disruption does not go much beyond the military and asymmetric disruption, said Eckart Woertz, director of the Giga Institute for Middle East Studies. Iran does not influence global infrastructural channels, such as payment systems that could be weaponised by sanctions, he added.
“However, the disruption it can inflict on Hormuz and via the Houthis on maritime security in the Red Sea is substantial.”
On Tuesday, the Houthis struck Saudi Arabian facilities targeting civilian and economic sites, wounding 73 people and setting oil installations ablaze.
That distinction matters. Iran does not need to bring the US economy to a standstill to make Americans feel the consequences of the conflict.
Oil prices have already demonstrated that connection. Brent crude climbed close to $100 a barrel on Tuesday, while tanker traffic in the Strait of Hormuz remains below prewar levels.
“When they say that they want to bring an economic war to the US, it doesn't necessarily mean that it is to the US,” said Mehran Haghirian, executive director of research and programmes at the Bourse & Bazaar Foundation.
All of the things they are attacking in the region are tied to the US one way or another, he said, while at the Hili Forum in Abu Dhabi.
Hormuz pressure point
The Strait of Hormuz remains Iran’s clearest source of global economic leverage.
Tehran has previously proposed greater control over passage through the waterway, including a system under which shipping could be insured using cryptocurrency. Pro-regime media claimed in May that the scheme could generate more than $10 billion in revenue.
Iran's proposed Hormuz Safe platform involved “cryptographically verifiable insurance policies” settled in Bitcoin, while a new Strait Authority said vessels would require permission to cross.
Yet turning control of a strategically important waterway into a sustainable source of economic power is much harder than disrupting it.
And it is a “red line” that Dr Thani Al Zeyoudi, Minister of Foreign Trade, said will not be crossed. “This is a red line for the UAE and should be for every country in the Gulf,” he said at the Hili Forum.
US pressure is also increasingly constraining Iran itself. Iranian crude exports have fallen sharply amid a US blockade and tougher sanctions, cutting into Tehran's primary source of foreign currency.
Iran therefore faces a fundamental problem: measures that increase the cost of global energy can also prevent it from selling its own oil.
China and Russia may provide Tehran with some economic breathing room, but Mr Haghirian cautioned against assuming they would join an Iranian economic confrontation with Washington.
“An ally is a big word to use,” he said. “None of them are real allies of Iran either and I don't think they would want to risk their relationship with the US in this context for a small win tactically in this current conflict.”
The cyber threat
Cyber attacks offer Iran another route to impose costs without matching the US economically.
Mohamed Amine Belarbi, founder and chief executive of cyber risk company Cypherleak, said Iran's threat should be taken seriously but that its demonstrated capabilities do not suggest it could paralyse the entire American economy.
“The evidence therefore supports an Iranian capability to cause localised outages, business interruption, recovery costs and reputational damage – potentially across multiple organisations simultaneously. It does not yet demonstrate the ability to produce prolonged, nationwide economic paralysis,” he said.
This is not the first time it has attempted this, Mr Belarbi said. Between 2011 and 2013, Iranian hackers targeted 46 major companies, mostly US financial institutions, in attacks spread over 176 days. The campaign prevented customers from accessing online banking and cost victims tens of millions of dollars in mitigation, the US Justice Department said.
US authorities have also warned that actors affiliated with the Islamic Revolutionary Guard Corps have compromised industrial control equipment used in American water and wastewater facilities, and other critical sectors.
Mr Belarbi said a more realistic threat was therefore an accumulation of attacks rather than one catastrophic event.
“The most plausible scenario is not a single digital ‘Pearl Harbour’ but an accumulation of relatively inexpensive attacks: denial-of-service campaigns, data theft and leaks, ransomware, destructive malware and attacks on poorly secured industrial equipment,” he said.
Such attacks could be costly without causing a national shutdown. Mr Belarbi used North Korea as an example of how a heavily sanctioned and conventionally weaker state can use cyber capabilities to impose disproportionate costs and steal money, including through cryptocurrency.
Economic war – but not as we know it
Iran can therefore hurt American economic interests but not in the conventional sense of an economic war between comparable powers.
Its leverage is asymmetric.
Tehran can potentially make oil more expensive, disrupt shipping, impose costs on American businesses through cyber attacks and increase economic pressure on US partners in the Gulf.
But those same actions risk further damaging Iran's already strained economy and provoking additional American retaliation.
“Beyond that, it's very unclear if Iran does have any other powers to be able to inflict that economic war on the US,” Mr Haghirian said.
The result is a paradox, he said. Iran may not have the economic strength to wage a traditional economic war against the US, but it does have the ability to make the wider global economy more expensive and less stable.
