WASHINGTON – The United States imposed new sanctions on VTB Bank on Monday, targeting one of Russia’s largest financial institutions over allegations that it helped Iran evade international restrictions.
The state-controlled lender is now among the largest global companies caught in Washington’s effort to weaken Iran’s economy as the nearly seven-month-old US-Iran conflict continues, with new flashpoints emerging in Yemen and Saudi Arabia.
Details: The US Treasury Department’s Office of Foreign Assets Control designated VTB under Executive Order 13902 for operating in Iran’s financial sector and creating correspondent banking relationships with sanctioned Iranian banks. According to the Treasury, the Russian state-owned bank is now among the world’s most comprehensively sanctioned financial institutions.
In a press release, the US government said VTB has opened offices in Iran in recent years and established correspondent relationships with sanctioned Iranian financial institutions over the past three years. The Treasury also said the bank began expanding its presence in Tehran in January 2025 and worked to transfer billions of dollars in frozen Iranian assets. VTB created a settlement system using Iranian rials and Russian rubles through correspondent accounts to support bilateral trade.
VTB was already subject to US sanctions. OFAC designated the bank in January 2025 for operating in Russia’s financial services sector and in February 2022 over its ties to the Russian government and financial industry.
The latest action requires the blocking of property and interests in property belonging to VTB that are located in the United States or controlled by US persons. It also exposes foreign financial institutions that conduct certain significant transactions involving VTB to potential secondary sanctions.
The move follows a series of actions under Operation Economic Outcast, the campaign Treasury Secretary Scott Bessent launched Aug. 24 after President Donald Trump announced his “Economic D-Day” plan. The Treasury has already targeted Iranian financial facilitators in Turkey and the United Arab Emirates and, last week, sanctioned 27 Iranian airlines along with additional companies and intermediaries involved in Iran’s aviation sector.
Bessent said the previous week that Washington planned to sanction a “large” bank as part of its continuing effort to increase pressure on Tehran.
Why it matters: Russian companies are increasingly becoming targets of US economic measures as the Treasury pursues a broad pressure campaign that is facing new challenges. Although VTB’s designation represents a significant step under Operation Economic Outcast, the bank’s long history with US sanctions means critics may argue that Washington has not gone far enough.
While much attention has focused on whether the United States will aggressively target Chinese entities, Russian firms have also provided Iran with important financial lifelines. That makes them key targets as the Treasury moves across oil, shipping, aviation, finance and digital assets to close remaining loopholes.
The Treasury has so far avoided major action against Chinese companies. The VTB sanctions come as Washington’s campaign and blockade of Iranian shipping appear to be increasing pressure on Iran’s economy, with oil revenues declining, inflation rising and the rial reaching record lows.
The key question is whether this pressure can compel Tehran to change course before Iran and its regional allies consolidate further influence. A rapid offensive by the Iran-aligned Houthis has strengthened the group’s control of the Bab al-Mandeb Strait, threatening Saudi Arabia’s ability to export crude as attacks also target the kingdom’s infrastructure.
Developments in Yemen and Saudi Arabia have added a volatile new dimension to the conflict while increasing Iran’s leverage over another crucial global energy route. Oil prices have risen sharply, with Brent crude trading near $110 a barrel this week and approaching wartime highs of roughly $120 reached in April.
