The US has announced a sweeping new set of sanctions on Iran, as Washington seeks to isolate the country’s economy in an effort to break the deadlock in the war.
In what it referred to as “Operation Economic Outcast”, 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 deadline to shut down Iran-related activity and serve a final notice to cut its economic ties.
“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” said US Treasury Secretary Scott Bessent.
The Treasury said it had identified five sectors Tehran uses to support its economy – digital assets, technology, gold, aviation and shipping.
The department also imposed sanctions on 60 companies, people and ships it accused of supporting Iran’s nuclear and missile technology procurement, cyber operations and oil revenue generation networks. The US has also suspended licences that had authorised 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 warned.
The Trump administration has shifted from military operations to economic pressure after a bombing campaign and naval blockade of Iranian ports failed to reopen the Strait of Hormuz, a chokepoint for about 20 per cent of the world’s energy supplies.
Iran’s rial slumped to a new low against the US dollar before Monday's announcement, with the currency trading at about two million to the dollar after falling by 4.5 per cent since last week, when President Donald Trump threatened to impose new sanctions.
Meanwhile, inflation remains higher than 80 per cent in the country of 93 million people. Oil shipments from Iran have all but dried up, cutting off a key source of government revenue. “Iran is completely collapsing,” Mr Trump wrote in a post on his Truth Social platform.
Describing the latest announcement as an “economic D-Day”, Washington has said countries must side with the US or risk becoming “global pariahs”.
“Those who tether themselves to Tehran should expect to share in the isolation of a withering regime,” Mr Bessent said.
It was not clear how Russia, China, India and Turkey – all of which maintain strong business ties with Iran – would be affected by the sanctions. However, Mr Bessent singled out countries that enable Tehran’s energy exports, financial transfers, aviation, shipping and banking.
The US has previously imposed sanctions on independent Chinese “teapot refineries”, which buy discounted Iranian crude.
Taking further action against Chinese banks could provoke tension before President Xi Jinping’s visit to Washington next month and may unravel a trade truce the two countries agreed to last year, while China’s rare-earth mineral restrictions also loom.
The UAE announced it was severing trade and financial ties with Tehran last week. The announcement came after two Iranian missiles were fired at the Emirates, and drone attacks on Adnoc-owned ships.
“I would think that the actions they took last week were not a coincident, but likely causal,” Mr Bessent said of the Emirates. He added that he believed other countries would follow suit.
The US and Israel launched co-ordinated strikes against Iran on February 28, killing its supreme leader, Ayatollah Ali Khamenei.
Iran retaliated by launching hundreds of drones and missiles at Gulf states, attacking US military sites across the region as well as vital energy infrastructure 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 between the US and Iran remain at a standstill and the Strait of Hormuz remains effectively closed, disrupting global energy flows.
Tehran has for decades weathered economic sanctions against its financial, aviation and cryptocurrency sectors, as well as members of the Islamic Revolutionary Guard Corps.
Last month, the US Treasury imposed sanctions on more than 100 ships linked to Iran’s shadow fleet, which it describes as a covert logistics network that allows Tehran to keep oil revenues flowing.
Washington has also placed restrictions on exchange houses, clandestine currency networks and cryptocurrency channels used by Tehran to move money outside the conventional banking system.
The EU, UK, Canada, Australia and Ukraine have also imposed measures against Tehran, while UN sanctions against Iran’s nuclear and missile activities were reimposed in September last year through the snapback process under the 2015 Joint Comprehensive Plan of Action.
The UN measures include restrictions on arms transfers, sensitive nuclear materials and technology, ballistic missile activity, asset freezes and other limits on designated people and entities.
Iran had vowed to retaliate against any new US sanctions. In a post on social media, Mohsen Rezaei, Secretary of the Supreme National Security Council, threatened that any country that joins 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. Yesterday, a tanker was struck by an unknown projectile west of the Saudi port city of Yanbu, leading to a fire on the ship’s main deck, the UK Maritime Trade Operations said.
All crew members were safe and accounted for, with no reported environmental damage.
Pakistan’s army chief, Field Marshal Asim Munir, arrived in Iran yesterday for talks, which Islamabad said were intended to “promote regional peace and stability”.
Badr Al Busaidi, Oman’s Foreign Minister, is scheduled to visit Tehran today to continue negotiations on the management of the Strait of Hormuz.
