The Trump administration announced on Monday an extension of secondary sanctions that can be imposed on entities and countries with business ties to Iran. This move intensifies economic pressure on Tehran as the conflict approaches its six-month mark. Treasury Secretary Scott Bessent introduced what he termed an “economic D-Day,” warning countries to sever connections with Iran or risk losing access to the dollar-based financial system for key companies and entities.
The U.S. Treasury Department revealed it has identified the networks and channels Iran uses for oil smuggling and sanctions evasion. The department, in collaboration with U.S. partners, aims to block any sources of Iran’s illicit revenue. Sanctions have been imposed on various sectors, including digital assets, technology, gold, aviation, and shipping, which Iran utilizes to support its economy. Nearly 60 entities, individuals, and vessels have been targeted with sanctions.
While China has been a major buyer of Iranian oil, the U.S. has been working to restrict Chinese purchases without yet targeting larger Chinese banks involved in the trade. Iran has warned of potential military retaliation and further reductions in Gulf oil exports in response to U.S. economic actions.
Iranian officials have affirmed readiness to face U.S. sanctions, with the Minister of Finance and Economic Affairs stating that Iran is prepared for any economic attacks. Additionally, a spokesperson for Iran’s Islamic Revolutionary Guard Corps (IRGC) has threatened significant consequences for U.S. interests and energy chokepoints if Iran’s infrastructure is jeopardized.
The ongoing conflict between the U.S. and Iran, now nearing six months, has led to global energy price increases. Despite reduced combat activities, diplomatic efforts to resolve the conflict have stalled, and shipments through the Strait of Hormuz remain blocked, maintaining elevated energy prices. President Trump’s approval ratings have declined recently, with only 33% of Americans approving of his performance. Trump defends the economic costs, citing the necessity to prevent Iran from acquiring nuclear weapons.
The U.S. has upheld sanctions against Iran for years, focusing on limiting oil revenues, targeting aviation and cryptocurrency sectors, restricting weapon procurement, and cutting off funding for IRGC-controlled businesses. Although these sanctions prevent designated entities from the dollar-based financial system, Iran has been adept at establishing new front companies and vessels to evade them.