Iran has vowed to retaliate against the recent U.S. sanctions expansion targeting its economy, expressing confidence that key trading partners will resist Washington’s pressure efforts. Treasury Secretary Scott Bessent unveiled the measures on Monday, nearly six months into the ongoing conflict that the U.S. has been struggling to resolve. Although these new sanctions fall short of the harshest penalties, Iran has been enduring years of U.S. and international sanctions that have severely impacted its economy without dissuading its leadership.
In response to the U.S. economic measures, Iran threatened potential military action and further cuts in oil exports from the Gulf. Iranian Economy Minister Ali Madanizadeh remarked that Iran is ready for any repercussions. He emphasized Iran’s shift from defensive to offensive strategies, warning enemies to be prepared for a counterattack. Additionally, he mentioned that China and Russia have not accepted the U.S. measures, and he expects other countries to resist them as well.
Brig.-Gen. Hossein Mohebbi, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, warned of severe consequences for U.S. interests and energy chokepoints if Iran’s infrastructure is endangered. Meanwhile, Iran’s currency, the rial, hit a record low as economic challenges persist, with high inflation and negative growth rates. The cost of daily essentials in Iran has surged significantly since the conflict erupted, with rice prices up by around 60% and beef prices soaring over 150%. The International Monetary Fund projects a contraction of more than five percent in Iran’s GDP.
President Trump’s recent social media post claiming that “IRAN IS COMPLETELY COLLAPSING!!!” contrasts sharply with his previous promise of assistance to Iranian protestors grappling with economic hardships. Despite an interim deal signed in June between Iran and the U.S. to end the conflict, it quickly faltered, leading to resumed attacks disrupting energy exports from the Gulf.
While Bessent warned countries continuing trade with Iran of potential exclusion from the dollar-based financial system, he refrained from specifying targets or timelines, allowing them time to comply with the new directive. He defended the limited scope of the sanctions, emphasizing the intention to avoid disrupting the global financial system. The Treasury Department imposed new sanctions on various individuals, entities, and vessels, but notably excluded Chinese financial institutions suspected of supporting Iran’s oil trade.
China, a significant buyer of Iranian oil, stated that its cooperation with Iran aligns with international law and should not face interference. Despite the sanctions, oil prices declined, reflecting market resilience despite concerns over Iran’s ongoing ability to disrupt shipping routes.
As diplomatic solutions remain elusive, tensions persist, with Iran capable of threatening its Gulf neighbors and oil tankers. The status of Iran’s nuclear program, a target for the U.S. and Israel, remains uncertain. Mediator Pakistan reported progress in discussions with Tehran to prevent escalation and reopen the Strait of Hormuz. The conflict has resulted in numerous casualties, primarily in Iran and Lebanon, impacting Iran’s military capabilities and economy. Ayatollah Ali Khamenei was killed, and his son Mojtaba was reportedly injured in airstrikes, assuming his father’s role amidst the ongoing turmoil.