US Treasury readies unprecedented economic pressure on Iran

Treasury Secretary Scott Bessent says the US is preparing to squeeze Iran with unprecedented economic pressure, a claim critics met with scepticism given existing sanctions and a naval blockade. The Trump administration has not detailed what it will do, but Bloomberg Economics analyst Chris Kennedy warned that unless Washington prioritises Iran over China, any action is unlikely to change Tehran's calculus.

Potential measures include targeting Chinese entities that buy over 90% of Iran’s oil exports, but hitting major Chinese banks risks worsening US-China relations ahead of a planned meeting between President Donald Trump and President Xi Jinping. Other options include sanctioning exchange houses in the UAE that help Iran repatriate funds, imposing secondary sanctions on any entity doing business with Iran, confiscating Iranian assets under US jurisdiction, or cracking down on the shadow fleet of vessels moving Iranian oil. Each option carries economic and diplomatic trade-offs, including higher global oil prices.

Bessent’s Treasury has already launched an 'Economic Fury' campaign, sanctioning some Iranian exchange houses and vessels. It remains unclear which mix of measures the administration will pursue, or whether Trump will follow through on threats of 25% tariffs on countries dealing with Iran.