The Trump administration announced on Monday an extension of secondary sanctions that can be imposed on entities and countries conducting business with Iran. This move intensifies economic pressure on Tehran as the conflict approaches six months. Treasury Secretary Scott Bessent termed this strategy as an “economic D-Day,” cautioning nations to sever ties with Iran to avoid repercussions on their key companies and financial connections. The U.S. Treasury Department disclosed that it has identified and will target the networks, facilitators, and financial channels Iran exploits to smuggle oil and evade sanctions. Sanctions have been imposed on various sectors such as digital assets, technology, gold, aviation, and shipping used by the Iranian government to support its economy. Notably, China, a major buyer of Iranian oil, has been a focus of U.S. efforts to halt these purchases without targeting significant Chinese banks involved in facilitating the trade.
Iran responded to the sanctions by warning of potential military actions and reducing oil exports from the Gulf in retaliation against U.S. economic measures. Iranian Finance and Economic Affairs Minister Ali Madanizadeh affirmed Iran’s readiness for the sanctions, stating, “Our defense is no longer so defensive; the enemies should wait for an attack.” Brig-Gen. Hossein Mohebbi of Iran’s Islamic Revolutionary Guard Corps (IRGC) threatened severe consequences for U.S. vital interests and energy chokepoints if Iran’s infrastructure faces threats.
The conflict between the U.S. and Iran has led to a global increase in energy prices. Although combat activities have decreased, diplomatic efforts to resolve the conflict have stalled, and the blockage of oil and raw material shipments through the Strait of Hormuz continues to elevate energy prices. President Trump’s approval ratings have declined, with only 33 percent of Americans approving of his performance, according to the latest Reuters/Ipsos poll. Trump justifies the economic costs as necessary to prevent Iran from acquiring nuclear weapons.
The U.S. has upheld sanctions against Iran for an extended period, primarily targeting the country’s oil revenues, aviation sector, cryptocurrency activities, weapon components procurement, and funding for IRGC-controlled enterprises. Despite these sanctions restricting entities from the dollar-based financial system, Iran has been agile in establishing new front companies, entities, and vessel registrations to evade them.