US president Donald Trump’s administration on Monday announced an expansion of secondary sanctions it can impose on entities and countries around the world that maintain business ties with Iran, as Washington increases economic pressure on Tehran with the war nearing its six-month mark.
At a press conference, US treasury secretary Scott Bessent announced what he described as an “economic D-Day” that aims to give a final warning to countries to sever their business ties with Iran or risk having key companies and entities cut off from the dollar-based financial system.
“We are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent said.
He said the US treasury department has mapped the networks, facilitators and financial channels that Iran uses to smuggle oil and evade sanctions and said Washington would be working with US partners to target any source of Iran’s “illicit revenue”.
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The department said it has issued determinations against five sectors – digital assets, technology, gold, aviation and shipping – that the Iranian government is using to prop up its economy. The US treasury has also imposed sanctions on nearly 60 entities, individuals and vessels.
China has for several years been the biggest buyer of Iranian oil and Washington has intensified its efforts to clamp down on Chinese purchases, but has so far stopped short of designating larger Chinese banks that may be facilitating the oil trade.
Trump’s war with Iran, which has pushed energy prices higher worldwide, is about to hit its six-month mark. While heavy fighting has subsided, diplomatic efforts to end the war have stalled and oil and raw material shipping through the Strait of Hormuz remains blocked, keeping energy prices high.
Trump’s approval rating has fallen to a low point, with just 33 per cent of Americans in the latest Reuters/Ipsos poll approving of his performance. He says the economic costs are necessary to ensure Iran does not have a nuclear weapon.
The US has maintained sanctions against Iran for decades, most of which have been aimed at curtailing the country’s oil revenues, aviation sector, cryptocurrency, procurement of weapons components and other military hardware, and cutting off funding for business enterprises controlled by the Islamic Revolutionary Guard Corps, a dominant force in the Iranian economy.
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The sanctions bar designated entities from the dollar-based financial system, but Iran has been successful in quickly standing up new front companies, other entities and vessel registrations to evade the sanctions.
Iran has been bracing for the sanctions for days, issuing a series of statements hinting at a big military response.
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said on Sunday further penalties would simply trigger a tighter squeeze on shipping through the Strait of Hormuz.
Pakistan’s army chief Asim Munir, who has built a personal rapport with Trump, was in Iran on Monday for talks, Iranian media said. Pakistan said the visit aimed “to promote regional peace and stability”, and a Pakistani source said Munir would meet people close to Iran’s supreme leader.
– Reuters
