Iran threatens retaliation against countries backing new US sanctions
US Treasury Secretary Scott Bessent has unveiled what he calls the largest financial offensive ever aimed at an adversary, while Tehran has vowed to retaliate against any nation that cooperates with the sanctions push.
US Treasury Secretary Scott Bessent has described fresh sanctions against Iran as the greatest financial offensive ever marshalled against an adversary. The measures target any country or entity trading with Iran through so-called secondary sanctions. Ahead of the official announcement, the United Arab Emirates, Iran's largest Middle East trading partner, announced it was halting all trade with Tehran, a move Iran believes was coordinated with Washington.
Iran's security chief, Mohsen Rezaei, warned that if Gulf neighbours join the US economic campaign, no oil would leave the Persian Gulf or the Strait of Hormuz, and threatened to target other regional oil export routes as well. Shipping through the strait remained heavily disrupted over the weekend, adding pressure to global energy markets.
Key players hold back
China, the top buyer of Iranian oil for decades, already told its firms in May to disregard US warnings. Beijing's foreign ministry has again rejected unilateral sanctions lacking international legal basis. However, unlike in May, Iran's oil shipments to Asia have nearly halted due to an effective US naval blockade, with the head of Iran's central bank admitting crude exports have virtually stopped.
The White House believes Iran's economy is again nearing collapse amid hyperinflation and a shortage of foreign currency. The rial traded at 1.992 million to the dollar on the unregulated market on Monday, down 4.5% over the past week.
Iran's foreign minister, Abbas Araghchi, dismissed the sanctions as a sign of US desperation, while a foreign ministry spokesperson said the measures would mainly harm ordinary Iranians. Tehran University professor Hassan Ahmadian said Iran has effectively been under sanctions since 2018, and that the renewed 'economic war' rhetoric reflects a US retreat after failed military action. Pakistan's army chief travelled to Tehran on Monday to revive talks on a stalled June memorandum concerning the Strait of Hormuz.