The U.S. will impose what it describes as the most severe sanctions in history on Iran, Treasury chief Scott Bessent said on Thursday, escalating economic pressure as oil prices surged to a three-week high. Bessent, speaking to CNBC, framed the measures as a ‘one-two punch’ combining existing trade restrictions with new restrictions aimed at collapsing the Iranian regime.
President Joe Biden amplified the warning on social media, pledging ‘economic warfare and isolation on an unprecedented scale.’ He threatened ‘tremendous economic consequences’ for any country—including China—allowing financial or logistical support to Iran, stating that ‘allies and the rest of the world must make a decision.’
Bessent dismissed suggestions that oil markets were overreacting to the announcement, noting that the sanctions were intended to curtail Iran’s oil exports, which remain a key revenue source despite decades of U.S. restrictions. ‘If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,’ he said, referring to potential military escalation.
The latest measures follow a months-long conflict that has disrupted Middle Eastern oil flows, with nearly a fifth of all traded oil previously passing through the Strait of Hormuz before February. Kpler data indicates that over 80% of Iran’s exported oil in 2022 has been purchased by China, which also relies on Gulf nations for about half of its energy needs. The U.S. has sought to pressure Beijing to reduce its oil purchases from Iran, though Chinese officials have repeatedly called for diplomatic solutions.
Iran’s Foreign Ministry condemned the sanctions as ‘economic terrorism,’ asserting they would not weaken national resolve. The Chinese embassy in Washington echoed this stance, stating that sanctions ‘do not help resolve the problem’ and urging ‘responsible actions’ from all parties.
The announcement comes ahead of U.S. midterm elections in November and follows two temporary ceasefire agreements in April and June, during which a naval blockade on Iran was paused for a month. Iran has faced near-continuous economic sanctions since the 1979 Islamic Revolution, with the latest measures representing a further tightening of the existing regime.
