The US on Monday announced a sweeping new set of sanctions against Iran, as Washington seeks to isolate the regime's economy in an effort to break the deadlock in the war.
The Treasury Department said it was broadening the scope of secondary sanctions on companies and countries that do business with Iran. It said every country would be given a specific time frame to shut down Iran-related activity and serve a final notice to cut their economic ties.
“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Treasury Secretary Scott Bessent told a press conference.
The Treasury said it had identified five sectors the regime uses to support its economy: digital assets, technology, gold, aviation and shipping. The department also imposed sanctions on 60 companies, people and vessels supporting Iran's nuclear and missile technology procurement, cyber operations and oil-revenue generation networks. Additionally, the US suspended licences that authorised certain remittance payments to Iran.
Any business or country operating on Iran's behalf could be cut off from the dollar-based financial system, the Treasury said.
President Donald Trump's administration has pivoted from military operations to economic pressure, after a military campaign and naval blockade failed to reopen the Strait of Hormuz, a chokepoint for about 20 per cent of the world's energy supplies.
Iran's currency slumped to a new low against the US dollar before Monday's announcement, with the rial falling 4.5 per cent since Mr Trump last week previewed more economic pressure. At the same time, inflation remains higher than 80 per cent for the country of 93 million people.
Oil shipments from Iran have all but dried up, cutting a key source of government revenue. “Iran is completely collapsing,” Mr Trump wrote in Truth Social post.
Describing the latest announcement as an “economic D-Day”, Washington has said countries must side with the US or risk becoming a “global pariah”.
“Those who tether themselves to Tehran should expect to share in the isolation of a withering regime,” Mr Bessent said.
It was not immediately clear how China, India and Turkey – all of which maintain strong business ties with Iran – would be affected. However, Mr Bessent singled out countries which facilitate Iran's energy exports, financial transfers, aviation, shipping and banking.
The US has previously targeted independent Chinese “teapot refineries”, which buy discounted Iranian crude. Taking further action against Chinese banks could provoke tension ahead of President Xi Jinping's visit to Washington next month and potentially unravel a trade truce the two sides agreed to last year, while China's rare-earth restrictions also loom.
US efforts to corral global partners received a boost last week when the UAE announced it was severing trade and financial ties with Tehran. The announcement came after two Iranian missiles were fired at the Emirates.
"I would think that the actions they took last week were not a coincident, but likely causal," Mr Bessent said, adding that he believes other countries will take similar actions.
The US and Israel launched co-ordinated strikes against Iran on February 28, killing its supreme leader Ayatollah Ali Khamenei. Iran retaliated by launch hundreds of drones and missiles at Gulf states, targeting US military sites across the region, vital energy facilities and desalination plants.
"The UAE have been very good partners and have taken the brunt of the iranian attacks in the Gulf," Mr Bessent said.
Currently, diplomatic talks remain at a standstill and the Strait of Hormuz remains effectively shut, snarling global energy flows.
Tehran has weathered economic sanctions for decades that have targeted its financial, aviation, cryptocurrency and members of the Islamic Revolutionary Guard Corps.
Iran vowed to retaliate ahead of Monday's announcement. Mohsen Rezaee, secretary of the Supreme National Security Council, wrote on X on that countries joining the US economic campaign would be treated as an “enemy”.
The result would be that “not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere” in the Gulf, he added. Tanker traffic in the Strait of Hormuz has been dwindling since the war began.
Earlier, a tanker was struck by an unknown projectile west of the Saudi port city of Yanbu, leading to a fire on the vessel's main deck, the UK Maritime Trade Operations said. All crew were safe and accounted for, with no reported environmental impact.
Pakistan’s army chief Field Marshal Asim Munir arrived in Iran on Monday for talks, which Islamabad said was to “promote regional peace and stability”. Badr Al Busaidi, Oman's Foreign Minister, was scheduled to visit Tehran on Tuesday to continue talks on the Strait of Hormuz. Oman has pursued separate talks with Iran on navigation through the Strait of Hormuz, while Washington and Tehran remain at an impasse.
