(AFP) – US Treasury Secretary Scott Bessent on Monday laid out plans for the “economic asphyxiation” of Iran, expanding Washington’s secondary sanctions threats and warning of dire consequences for countries that do not join the campaign. The announcement comes almost six months into a war on Iran that has ground to a stalemate, with stalled peace talks and Tehran blocking most traffic through the crucial Strait of Hormuz.
Bessent earlier said the United States was declaring an “economic D-Day” on Iran, but his announcement named no specific countries beyond Iran and gave no timelines. “Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent told journalists. “We are going to hold everyone accountable, and this is economic asphyxiation of this regime.” He added that countries not joining US sanctions would “share in the isolation” of Iran and noted that President Donald Trump was making phone calls to world leaders with requests to stop interactions with Tehran.
The Treasury Department said expanded secondary sanctions would target Iran’s digital assets, technology, gold, aviation, and shipping sectors. It also issued new sanctions against 60 individuals, companies, and vessels that allegedly aid Iran in oil revenue generation, weapons procurement, and cyber operations. The sanctions hit entities around the world, including in the United Arab Emirates, Hong Kong, China, Singapore, and in Europe. Bessent vowed that any entity “that facilitates money laundering on behalf of Iran will be removed from the US dollar system.”
In a post before the announcement, Deputy Foreign Minister Kazem Gharibabadi said the latest US threats were an admission of military defeat and warned countries against aiding Washington. “Your narrative doesn’t add up,” Gharibabadi said, asking why, if Washington had achieved its goals, “there is a need for ‘the largest financial invasion in history’ and the mobilization of ‘all institutions and powers’ of the United States!” He questioned whether this was a victory or an admission of America’s defeat.
The US and Israel linked the launch of their war in February to Iran’s nuclear program, but the focus since the early days of fighting has been on the Strait of Hormuz, a vital route for global oil and gas supplies. Tehran continues to blockade the strait, which it did not restrict before the war, driving up global inflation and heaping domestic pressure on Trump ahead of midterm elections in November. Iran has weathered decades of crushing international sanctions, and before the war, it continued to export millions of barrels of oil, mostly to China, and to evade sanctions through complex international financial networks.
Asked on Monday if Chinese banks would be targeted by the new sanctions, Bessent said “no one is above the reach of US sanctions.” The US naval blockade of Iran has seen its oil exports via the Strait of Hormuz fall from two million barrels a day pre-war to just 0.4 million by mid-August, according to maritime tracker Kpler. For ordinary Iranians, the standoff is likely to bring only more economic pain after years of rampant inflation, which in December and January fueled massive anti-government protests. Sarah Hassanbeigi, a 32-year-old pharmacist in Tehran, said: “I don’t think people can really take this much longer.” The US announcement on Monday also suspended sanctions exemptions for payments to and from Iran related to the US educational system.
Last week, Iranian President Masoud Pezeshkian, considered a relative moderate, said Tehran should “bring the war to an end now as we are in a position of power.” That followed Supreme Leader Mojtaba Khamenei appointing hardliners to key security positions. Throughout the war, diplomatic efforts, pushed on by mediators, have sought a negotiated end to the conflict. On Monday, Pakistan’s army chief Asim Munir visited Iran and met with Iranian Parliamentary Speaker and chief negotiator Mohammad Bagher Ghalibaf. Islamabad was a leading mediator in talks that helped secure an April ceasefire that later fell apart. It is also a major trading partner of Iran, possibly opening it up to the threat of the new sanctions. Oman’s foreign minister was due in Iran on Tuesday, as Muscat and Tehran seek a deal on regulating passage through Hormuz.
– AFP teams in Washington, Tehran, and Dubai
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