Iran Threatens Retaliation Against Nations Complying with New U.S. Sanctions

Tehran warned it would retaliate against any nation that assists the United States in imposing new sanctions on Iran, which Treasury Secretary Scott Bessent described as ‘the single greatest financial offensive ever launched against an adversary’.

Before the U.S. announcement, the United Arab Emirates—Iran’s largest trading partner in the Middle East—said it would halt all trade with Iran, a step Tehran views as coordinated between Washington and Abu Dhabi.

The United States said it will levy sanctions on any country or entity that trades with Iran, a policy known as secondary sanctions.

The credibility of the U.S. warning will hinge on whether nations such as India, China, and Russia believe that continuing to trade with Iran could provoke meaningful American retaliation. China has long been the top buyer of Iranian oil.

In May, the United States threatened sanctions on Chinese refiners and the banks financing them, but China’s commerce ministry instructed firms to disregard the warnings, calling the threats illegitimate and invoking a domestic statute intended to nullify U.S. sanctions within its jurisdiction.

Washington had previously sanctioned Hengli Petrochemical’s Dalian refinery in April, but later retreated after President Donald Trump recognized that the move risked sparking a broader trade and tariff conflict with China that the United States would likely lose.

Chinese Foreign Ministry spokesperson Lin Jian reiterated Beijing’s opposition to unilateral sanctions lacking grounding in international law, stating that military action, sanctions, and pressure tactics are not the solution.

Unlike in May, Iran’s oil exports to Asia have largely ceased because of an effective U.S. naval blockade of its ports, pushing freight costs to multi‑year highs. Last week, Central Bank Governor Abdolnaser Hemmati acknowledged that crude shipments have ‘virtually stopped’ due to the blockade.

The White House assesses that Iran’s economy is again teetering on collapse, hampered by hyperinflation and dwindling foreign‑exchange earnings caused by the U.S. blockade of oil sales. On Monday, the rial traded at 1.992 million per dollar on the unofficial market, down 4.5 % since the president unveiled a ‘crushing economic operation’ against Tehran last week.

Iran has endured more than two decades of U.S. maximum‑pressure economic tactics and, so far, has resisted them.

Security Chief Mohsen Rezaei warned that Tehran would respond with an ‘earthquake‑like’ retaliation if Washington proceeds with the proposed measures, and urged Iran’s Gulf neighbors not to join the U.S. sanctions drive.

“If the countries surrounding Iran side with the United States in this economic war, no oil will leave the Persian Gulf or the Strait of Hormuz,” Rezaei said, adding that Iran would also target alternative Gulf export routes.

Strait traffic remained severely disrupted over the weekend, intensifying pressure on global energy markets.

Foreign Minister Abbas Araghchi characterized the looming sanctions as a sign of U.S. desperation, arguing they will not topple Tehran and noting that Washington has shifted from military actions to what he calls ‘the same old plans’.

Reza Nasri, an international lawyer with links to the Iranian foreign ministry, said: “The announcement is not a measure against Iran. It is a claim of jurisdiction over the world, and every sovereign state on Earth is its real addressee. Iran is merely the occasion. The demand that no country allow its own banks, businesses, airports or ship registries to engage in lawful trade with another country is aimed at everyone else. Sovereignty itself is the target.”

Esmail Baghaei, the Iranian foreign ministry spokesperson, said: “Repeating methods that have previously proven to fail will not produce any different results, except that it shows the extent to which America is hostile and spiteful towards each and every Iranian, because it knows very well that the effects of these sanctions will affect ordinary Iranian citizens.”

He added: “Obliging or intimidating other countries to stop or limit their trade relations with another country means violating the most important foundation of international relations and the most fundamental pillar of the United Nations charter, which is respect for the national sovereignty of countries.”

Hassan Ahmadian, a professor of west Asian studies at the University of Tehran, said: “There isn’t a single new sanction. Everything in Iran has been under primary and secondary sanctions since 2018. Since these sanctions failed to achieve the goals the US and Israel wanted, both sides turned to military action. The big fanfare about an ‘economic war’ is really just a public admission of a major step backward. After failing militarily, Washington is clearly stepping back to square one – the economy.”

He said Iran had been signalling in recent weeks that US economic warfare was no longer an acceptable option for Tehran and it would prefer going to war rather than standing idly by in the face of the US implementing the blockade. He said this involved “Iranian calculations related to military capabilities, the American domestic situation, and the Iranian domestic situation”.

Last Thursday Bessent claimed in an interview with CNBC that “the US will lead the Islamic Republic of Iran to collapse with the toughest sanctions in history”.

The Treasury secretary claimed “the US government is asking its allies and the rest of the world to stop trading with Iran”. He added that the US “will use all its power against anyone who does not comply with this demand”.

“Either the countries are with us or against us,” Bessent said. “It is time for our allies and the rest of the world to decide, and we will destroy the economy of this regime.” Writing in the Financial Times on Sunday, he said: “Total financial isolation can obviate the need for American force while enlarging the sphere of freedom for our allies. Those who sever Iran’s remaining financial and commercial connectivity will reinvigorate their own. They will deepen their access to global capital, reinforce confidence in their markets and attain the standing they seek in the world economy.”

But China and Russia have so far shown no interest in succumbing to US pressure.

By coincidence, Pakistan’s army chief, Field Marshal Syed Asim Munir, flew to Tehran on Monday where he will explore the opportunity to revive talks on the stalled memorandum of understanding signed in June, but not implemented either by Iran or the US largely due to a dispute about whether the memorandum granted Iran interim control over shipping in the strait of Hormuz.

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