US Unleashes ‘Economic D-Day’ Sanctions as Iran Threatens to Halt All Gulf Oil Exports

By Yasmine Ghania and Kanishka Singh

CAIRO/WASHINGTON, Aug 24 (Reuters) — The United States unveiled what it described as the most aggressive financial offensive in history on Monday, targeting Iran’s global trade partners with sweeping new economic sanctions. In response, Iran threatened to completely shut down oil exports from the Persian Gulf if the economic pressure persists.

U.S. Treasury Secretary Scott Bessent is scheduled to hold a press conference at 1 p.m. EDT (1700 GMT) on Monday, where officials are expected to announce severe measures against a nation that has faced continuous economic isolation since the 1979 Islamic Revolution.

In an opinion piece published in the Financial Times on Sunday, Bessent framed the upcoming sanctions as a historic turning point. “At dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary,” he wrote.

The announcement comes amid a six-month conflict between the two nations. While direct military strikes between the U.S. and Iran have paused in recent weeks, diplomatic efforts to end the conflict have stalled. Since the U.S. and Israel began strikes on February 28, thousands have died, predominantly in Iran and Lebanon. The campaign significantly degraded Iran’s conventional military capabilities and inflicted severe economic damage, culminating in the death of Iranian Supreme Leader Ayatollah Ali Khamenei.

Despite these losses, Iran has maintained sufficient missile and drone capabilities to threaten Gulf neighbors and disrupt maritime traffic in the strategic Strait of Hormuz, bringing global shipping to a near standstill and driving up international fuel prices. The precise status of Iran’s nuclear program, which the U.S. and Israel have targeted for elimination, remains unclear.

Without specifying the exact measures, Bessent indicated that the U.S. would penalize nations that continue to engage with Iran’s economy and financial system. “They would do well to consider the consequences of sustaining it,” he warned.

Tehran has anticipated these sanctions for days, issuing a series of stern warnings hinting at severe retaliation. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, suggested direct economic countermeasures on Sunday. “If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf,” Rezaei stated on social media. “Iran will regard any country’s participation in or support for America’s economic war against the Iranian people as an act of war.”

The U.S. has also pressured China to cease economic cooperation with Tehran, highlighting that the Gulf region historically supplies half of China’s oil imports. A spokesperson for the Chinese embassy in Washington countered that “sanctions and pressure do not help resolve the problem,” advocating instead for diplomatic resolution.

Prior to the recent military escalation, Iran’s economy was already struggling under the weight of international sanctions, high inflation, a weakening currency, and severe energy shortages. The conflict has since devastated critical infrastructure, disrupted trade, and halted production, compounding Tehran’s economic crisis.

In the absence of direct bilateral talks, which were last held in June in Switzerland, third-party nations including Qatar, Pakistan, and Turkey have attempted to mediate. Iran announced that Pakistan’s Army Chief, Asim Munir, will visit Tehran on Monday to discuss regional peace and security. Pakistan has been actively mediating, and government sources indicate Munir will address the latest U.S. sanctions threat.

The ongoing U.S.-Israeli strikes on Iran and Israeli operations in Lebanon have resulted in thousands of casualties and millions of displacements. The U.S. has reported 18 military personnel killed and over 750 wounded in the conflict.

(Reporting by Yasmine Ghania in Cairo and Kanishka Singh in Washington; Writing by Daniel Trotta; Editing by Chris Reese and Christian Schmollinger)

Source link