The United States is escalating its economic campaign against Iran, threatening countries, banks, shipping companies and other entities that continue to maintain commercial ties with Tehran as Washington seeks to cut off the Iranian regime’s remaining financial lifelines.
The campaign, described by US Treasury Secretary Scott Bessent as an “economic onslaught” against Iran, marks a significant expansion of Washington’s use of secondary sanctions. The strategy is aimed not only at Iranian companies and institutions but also at foreign governments and businesses that purchase Iranian oil, facilitate financial transactions or help Tehran circumvent American restrictions.
The initiative, referred to by the US as “Operation Economic Outcast,” comes as the conflict between the United States and Iran approaches its six-month mark, with no clear political settlement in sight.
“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent said.
The administration has so far provided relatively few details about exactly which countries or organizations could face penalties. Instead, Washington has initially adopted a pressure-and-warning approach, urging governments and companies to voluntarily end their economic relationships with Iran before sanctions are imposed.
Bessent said US President Donald Trump was personally contacting foreign leaders and making “specific requests” that they stop interacting economically with the Iranian government.
However, when asked which leaders had been contacted, Bessent declined to identify them.
“We’re not going to name names,” he said.
He warned that governments that refuse to comply with Washington’s demands should prepare to face consequences.
Those who reject US requests, he said, “should expect to share in the isolation of a withering regime.”
Bessent also said every country had been given a defined period to shut down activities identified by Washington as supporting Iran’s economy, although he declined to provide specific deadlines.
“I’m not going to set timelines, but we do not have infinite patience here,” he said.
The US Treasury has identified five sectors of the Iranian economy for particular attention: digital assets, technology, gold, aviation and shipping.
Washington has also moved against nearly 60 entities, individuals and vessels operating across multiple jurisdictions, according to the Treasury. Some of those targeted are allegedly connected to procurement networks supporting Iran’s nuclear and missile programs, cyber operations and systems used to generate oil revenues.
The campaign expands an already extensive American sanctions architecture that has been imposed on Iran over several decades.
Among the principal targets are purchasers of Iranian crude oil, shipping companies transporting Iranian petroleum, exchange houses involved in transferring Iranian funds and banks facilitating transactions connected to Tehran.
Countries and companies accused of ignoring sanctions-evasion practices are also coming under scrutiny.
One area of concern is the transfer of Iranian oil between vessels at sea, a practice that can make the origin of petroleum cargoes more difficult to identify and has been used by sanctioned oil networks to continue exports.
The US is also seeking to disrupt networks of intermediaries, shell companies and financial conduits that allow Iranian money to move through international markets.
The approach reflects Washington’s belief that targeting Iran alone is no longer sufficient. Instead, American officials are seeking to make doing business with Iran increasingly costly for foreign companies and governments.
Although Bessent did not name countries that Washington considers major “enablers” of Iran, China is expected to be one of the central focuses of the campaign.
China has for years been Iran’s most important oil customer and a major trading partner. Iranian crude exports to Chinese buyers have provided Tehran with a crucial source of foreign currency despite repeated rounds of US sanctions.
Naysan Rafati, a senior Iran analyst at the International Crisis Group, said Iran’s economic networks extended through numerous intermediaries and shell companies around the world.
“Iran’s network of conduits, middlemen, shell companies are dotted everywhere,” Rafati said.
But he noted that China’s economic importance made it particularly significant to Washington.
“In terms of primary economic significance, obviously China, being a major trading partner of Iran, a major oil consumer of Iran when the blockade at least isn’t in place, is probably one that the Treasury department will be looking at very closely,” he said.
The issue could create a new complication in US-China relations, particularly at a time when Washington and Beijing are attempting to maintain a fragile trade truce.
Bessent was specifically asked whether Chinese banks that facilitate transactions involving Iran could be protected from sanctions because of the broader economic relationship between the world’s two largest economies.
His response was unequivocal: no institution should assume it is beyond the reach of US sanctions.
“We find that the best way to engage with countries is through quiet diplomacy,” Bessent said.
“We are level setting with every country to tell them our expectations.”
The warning could place additional pressure on Chinese financial institutions and companies that have developed mechanisms to process Iranian trade while avoiding direct exposure to the US financial system.
China is not the only country whose commercial relationship with Iran could come under scrutiny.
The United Arab Emirates, Iraq, Türkiye and India have also been significant economic and trading partners of Iran in recent years.
The UAE has traditionally served as an important commercial and financial hub for Iranian businesses, while Iraq and Türkiye maintain extensive economic links with their Iranian neighbour. India has also maintained significant energy and commercial relationships with Tehran.
However, the UAE’s position has shifted amid the conflict.
The country, which has itself faced Iranian retaliatory strikes during the war, said last week that it had suspended all trade with Iran.
That development could demonstrate the type of response Washington is seeking from other governments: a voluntary reduction or termination of economic ties rather than an immediate escalation through sanctions.
Nevertheless, the possibility of US penalties creates difficult choices for countries that depend on Iranian energy, trade routes or commercial relationships.
Secondary sanctions can potentially cut foreign companies off from the US financial system, restrict their access to dollar transactions and make it significantly harder to conduct international business.
Iran has lived under US sanctions for decades, and the effectiveness of additional restrictions remains a matter of debate.
Alan Eyre, a former US diplomat who served on the American nuclear negotiating team until 2015, argued that Washington has already imposed sanctions on many of the most important areas of Iran’s economy.
“When it comes to sanctions, we’ve done the low-hanging fruit, the mid-hanging fruit, the high-hanging fruit, the tree,” Eyre said.
“So there are no new sanctions that are effective.”
Iran has nevertheless experienced increasing economic pressure as the conflict has intensified.
The US blockade of Iranian crude exports has placed additional restrictions on the country’s principal source of foreign earnings. At the same time, Iran’s currency has fallen to record lows and inflation remains high.
The war has also caused extensive damage to sectors outside the oil industry, including parts of the country’s steel industry.
Rafati said these conditions could make the latest American measures more consequential than previous rounds of sanctions.
“These measures will undoubtedly have an impact,” he said.
The central question, however, is whether economic pressure can translate into political concessions.
The history of US-Iran relations suggests that sanctions can contribute to negotiations.
Economic pressure played a role in bringing Tehran to the negotiating table during previous periods of confrontation, including the diplomacy that eventually produced the 2015 nuclear agreement.
But Rafati cautioned that Iran’s response would depend heavily on what Washington ultimately demands.
He argued that Tehran might be willing to negotiate an agreement that reduces pressure and provides a pathway for economic survival, but it would be unlikely to accept what it sees as unconditional surrender.
Iran, he said, would seek “a deal that they could also live with — something that was less than total capitulation.”
“If the [US’s] objective is a wholesale kind of surrender by the Iranian system, that is a much taller order,” he said.
The stakes extend beyond economics.
A campaign designed to isolate Iran could also increase the risk of renewed military confrontation. Although fighting has recently been relatively limited, Iran retains the ability to conduct retaliatory attacks against US forces and American allies across the region.
“Right now, as we’re speaking, the guns have been relatively silent,” Rafati said, warning that Iran still has the capability to conduct counterpressure strikes against US allies or American assets.
That creates a difficult balance for Washington.
The Trump administration wants economic pressure to force Tehran into a more favourable political settlement without necessarily triggering another major escalation. But the broader the sanctions campaign becomes, the greater the number of governments and commercial interests that could be drawn into the confrontation.
For Iran, the challenge is equally stark. Its access to oil revenues, foreign currency and international financial networks is already under severe pressure. Further isolation could deepen economic instability and weaken the government’s ability to finance essential imports and maintain domestic economic activity.
For Washington, meanwhile, the success of Operation Economic Outcast will depend not simply on how many Iranian entities are sanctioned, but on whether other countries are willing to enforce America’s demands.
If major trading partners continue purchasing Iranian oil and financial institutions continue facilitating transactions, Tehran may retain enough economic connections to withstand the pressure.
But if Washington succeeds in persuading major economies to sever those relationships, the campaign could substantially narrow Iran’s remaining economic options.
