With peace talks stalled, and most traffic through the crucial Strait of Hormuz blocked, the US turned to pulling economic levers six months into a war on Iran. This comes at a time when Iran, where one dollar now costs 2 million Iranian rials, has already been grappling with huge inflation.
On Monday, announced ‘Economic D-Day’ sanctions aimed at crippling Iran’s economy and pressuring the Islamic Republic into submission amid war with the US.
Declaring what is being called the “Operation Economic Outcast,” Bessent said the “objective is to sever every economic lifeline that sustains this tyrannical regime”. The US sanctioned nearly , entities and vessels.
Bessent also announced that countries that did not support the would “share in the isolation” of Iran, adding Trump was making phone calls to world leaders asking that they halt interactions with Tehran.
Meanwhile, urged US allies to join Washington in isolating Iran. He also warned that countries allowing their financial institutions, businesses, airports or government entities to provide support to Iran would face economic consequences.
“We’ve had Operation Epic Fury to destroy their military. Now we have Operation Economic Outcast to destroy their economy,” Former White House press secretary Karoline Leavitt told Fox News on Thursday, while highlighting that “no negotiations” with Iran “are happening right now.”
How Iran plans to counter Trump’s ‘economic D-Day’
Iran’s Supreme National Security Council secretary Mohsen Rezaei warned Thursday, August 27, that Tehran would retaliate against US economic interests if the maritime blockade against Iran remained in place.
“If the blockade continues, we will target US economic interests 100 percent, with intensity and force,” Rezaei said in an interview with Lebanon’s Al-Manar television.
Last week, the spokesman of Islamic Revolutionary Guards Corps (IRGC), Brigadier General Hossein Mohebbi, was quoted by Mehr news as saying that Iran has plans for each plot drawn by the United States amid escalated economic war.
“We have repeatedly announced that we have a scenario for every hostile action by the enemy. One of the enemy’s hostile actions is economic war. We have a scenario to repel the adverse effects of the enemy’s war and easily establish economic relations with countries; there is no concern in the economic field…,” Mohebbi was quoted as saying.
1. Iran appeals to all countries: ‘Don’t join US’s economic war’
On Saturday (August 22), Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, told the IRIB state broadcaster that Iran was appealing to all countries around the world, including its neighbours, not to join the US’s “economic war”.
“Any country that takes part in imposing economic restrictions on us will be regarded as an enemy,” he said, warning of “seismic” retaliation, according to Al Jazeera.
2. Iran threatens to halt all oil exports: ‘not even a drop of oil’
Rezaei also warned Iran’s neighbours that if they participated in Trump’s economic warfare, “not even a drop of oil” would leave the Gulf region, including by “alternative export” routes away from the Hormuz chokepoint through which a fifth of global oil and gas exports pass in peacetime.
By alternative export routes outside Hormuz, he probably pointed to the Bab al-Mandeb Strait gateway to the Red Sea.
The ongoing US naval blockade and Iranian restrictions in the Strait of Hormuz, a key economic trade route, have already driven oil prices to a record high. They have prevented countries in the region from exporting oil and gas via a route that, before the war, accounted for a fifth of global supplies.
Meanwhile, Iran’s proxy in Yemen, the Houthi group, has recently opened a new front in the Red Sea, targeting Saudi oil exports and infrastructure.
3. Iran’s strategy: ‘Three-stage sequence’
According to Al Jazeera, Rezaei described Iran’s strategy as a three-stage sequence, starting with talks with countries cooperating with the US to de-escalate tensions.
“Of course, we will first negotiate with them. We will hold talks and tell them to step aside and distance themselves from the United States,” Rezaei was quoted as saying.
“But if they do not act, we will strike. We will target that country’s interests,” he added.
4. Tehran warns of expanded strikes
Iran also warned of expanded strikes on regional oil producers and European countries, and even teased weaponisation of its nuclear program.
“We’ve been playing chess for a long time…we’ve also learned to play poker,” Iran’s Foreign Ministry spokesperson Esmail Baghaei told reporters on Monday. “Now, for some time, we’ve been playing a combination of the two.”
According to CNN, Iran’s Foreign Ministry pointed to US refueling aircraft leaving Bulgarian territory, warning on Monday that Tehran could target the European Union nation, which is also a NATO member.
“Iran has the legitimate right to target the point of origin and source of any act of aggression,” Iran’s Foreign Ministry spokesperson Esmail Baghaei told reporters on Monday, CNN reported.
He added that Tehran has “made clear that any action regarded as supporting US and Israeli military aggression against Iran constitutes, under international law, participation in an act of aggression.”
5. Weaponisation of its nuclear program
On Sunday, Rezaei issued a rare statement touting the possibility of the country developing a nuclear weapon. “The whole world is saying, ‘So the NPT has no effect?’” he told the state broadcaster in an interview, adding, “when America is carrying out such a war, people ask: Why shouldn’t we pursue nuclear weapons ourselves?”
Around half a ton of highly enriched uranium – which can be used to build a weapon – remains buried inside Iran, with US intelligence assessing that Tehran has escalated efforts to seal off the cache, CNN reported.
Will Iran’s retaliation impact US?
Iranian Parliament Speaker warned US President Donald Trump that his new campaign to isolate Iran’s economy would come at a cost to American taxpayers and businesses.
In a post on his X account on Sunday, Ghalibaf rebuked Trump and his planned initiatives, sharing a video showing that economic pressure on Iran and disruptions in energy markets could ultimately have consequences for the United States.
“Importing frozen meat to fix meat prices? Okay, that might work,” he wrote, referring to recent measures by the US president to control prices of goods in his country, but simultaneously questioned how the Trump administration plans to address other economic challenges.
“What’s your plan for bonds?” Ghalibaf hit out at Trump, taunting him as if he is going to import “frozen yields for bonds, frozen homebuyers for housing, and frozen paychecks for wages.”
Stating that “a frozen foreign policy produces a frozen [stagnant] economy,” the top parliamentarian warned the US president that “the only thing still moving is Iran’s boomerang, coming right back at your face.”
