Iran has threatened to retaliate against expanded US sanctions that Washington says will cut off the regime’s economic lifeline, with the economy minister warning that they “know how to play the game” and have drawn up a two-year plan.
US Treasury Secretary Scott Bessent on Monday unveiled the measures he likened to “economic D-Day” but fell short of the most punitive sanctions. He said countries that continued trading with Iran risked being driven out of the dollar-based financial system.
Tehran has said it is “prepared” for these sanctions with a “two-year plan to manage these events” – a similar measure to the rest of Trump’s presidency – and has even warned that their “enemies must wait for an attack.”
While Bessent declined to identify the countries that would be targeted or reveal when the sanctions would take effect, Tehran expressed confidence that its major trading partners would resist Washington’s pressure campaign.
The US Treasury Department announced “the toughest sanctions in history” against 60 individuals, entities and ships, but the list did not include any Chinese financial institution suspected of facilitating Iran’s oil trade.
Before the news, Iran threatened both a possible military response and a further reduction in oil exports from the Gulf, in retaliation for any upcoming US economic measures.
After they were unveiled, Iranian Economy Minister Ali Madanizadeh said: “We are fully prepared for the US sanctions.”
He told state television: “Of course the enemies plan to launch an economic terrorist attack on us, but we also have our own instruments and know how to play the game. Our defense is no longer so defensive; the enemies must wait for an attack.’
Iranian Economy Minister Ali Madanizadeh said: ‘We are fully prepared for the US sanctions’
Mohsen Rezaei, former Revolutionary Guard chief and secretary of Iran’s Supreme National Security Council, has previously threatened to halt oil exports (May 2021)
Video footage shared by the Iranian Revolutionary Guards’ Sepah News website shows a missile being launched from a secret location towards US targets in Jordan, Kuwait and Bahrain (July 2026)
“We have been waiting for these plans for a long time, and the government is and was ready and has a two-year plan to manage these events,” he added.
Madanizadeh further claimed that neither China nor Russia had “accepted” the US measures, predicting that other countries would also oppose them.
The announcement sent Iran’s currency – the rial – plummeting to its lowest rate in history.
Although the US said the sanctions were aimed at forcing Iran to meet its demands by crippling the country’s economy and bringing its leadership back to the negotiating table with US counterparts, the risk of further escalation in the region is feared as a result.
Brigadier General Hossein Mohebbi, a spokesman for Iran’s Islamic Revolutionary Guard Corps, has vowed heavy blows to US vital interests and energy chokepoints if Iran’s infrastructure is threatened, Press TV reports.
Beforehand, Mohsen Rezaei, former Revolutionary Guard chief and secretary of Iran’s Supreme National Security Council, had threatened to halt oil exports – one of Tehran’s most important strategic approaches since the start of the war on February 28.
“If the economic war continues, not a single drop of oil will be exported, either through the Strait of Hormuz or anywhere else in the Persian Gulf,” he said.
For decades, Iran has faced layers of U.S. and international sanctions that have hit its economy but failed to deter its leadership.
At a press conference yesterday announcing the latest measures, Bessent said: “We are launching an economic attack on Iran’s connections around the world. Our goal is to cut every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”
“The U.S. Treasury Department has initiated Operation Economic Outcast, an unprecedented campaign against the Islamic Republic of Iran and its enablers,” Bessent said at a news conference.
For decades, Iran has faced layers of U.S. and international sanctions that have hit its economy but failed to deter its leadership
The new sanctions target digital assets, technology, gold, aviation and shipping, Bessent said.
“No one is beyond the reach of US sanctions,” Bessent said when asked about China’s trade ties with Tehran. “Now is the time for world leaders to make a decision between America and Iran.”
This move serves as a final warning to countries still doing business with Iran and Bessent said he wanted to give countries and companies time to cut ties.
Bessent previously urged cooperation from China, which has been the largest buyer of Iranian oil for years, although the US blockade of Iranian ports, which was renewed in mid-July, has already reduced Iranian oil flows to China.
Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between Trump and Chinese President Xi Jinping, with any restrictions on Chinese exports of crucial minerals particularly sensitive.
China’s Foreign Ministry said sanctions and pressure techniques would not help and that Beijing would do what was necessary to protect Chinese interests.
Iran and the United States signed an interim peace deal in June, but the Islamabad memorandum, as it is known, quickly faltered.
Mediator Pakistan has made “significant progress” in the latest talks with Tehran that focused on measures such as preventing further escalation of the conflict and reopening the Strait of Hormuz, the Pakistani military said in a statement on Tuesday.
“The Iranian president candidly shared his government’s perspective and we had a very constructive exchange of views on the issues involved,” Interior Minister Mohsin Naqvi, who accompanied army chief Asim Munir to Tehran, said on X.
Despite progress in the latest peace talks, unrest in the region has continued – although there have been no major strikes by either side for weeks.
Previous Iranian attacks and threats to shipping have already halted most traffic through the Strait of Hormuz, largely cutting off a waterway that carried about a fifth of the world’s energy before the conflict.
Although some oil tankers have passed through the strait in recent weeks, volumes remain very low and on Sunday Iran blacklisted 45 tankers that it said did not comply with the rules it wants to impose on Hormuz shipping.
Meanwhile, Tehran’s Houthi allies have restricted shipping in the Red Sea with attacks and threats to block all Saudi Arabian shipping, which carries crude oil to Asia through the Bab el-Mandeb Strait past the group’s Yemeni stronghold.
Although the attacks initially stopped only a few ships, with more than half still passing through as of mid-August, the situation is difficult for shippers, according to industry sources, as Chinese shipping companies are now rerouting from Bab el-Mandeb.
Iran has also threatened to retaliate against any neighboring countries that join US efforts to strangle the country’s economy with “earthquake force.”
During the war, the country has repeatedly targeted the Gulf states and Jordan, mainly targeting U.S. bases, but also energy infrastructure and other targets.
The attacks on oil and gas facilities have helped drive up energy prices and are a means of inflicting political and economic damage on President Trump’s administration.
There were recent attacks in the region on Monday on a ship off the Saudi Red Sea’s main oil terminal in Yanbu, with another drone strike near the Suez Canal in early August.
Outside the Middle East, Tehran has hit the West with cyberattacks, most recently with Iran-linked hackers shutting down a small electricity substation in Britain, the British government said.
US officials have said Tehran was also likely behind cyber attacks on water plants in Minnesota. Iran has not commented on these allegations.
Nearly six months have passed since the US and Israel launched attacks on Iran. Thousands of people have died, most of them in Iran and Lebanon.
