Key takeaways:
- Scott Bessent said the US plans the “greatest coordinated economic isolation in the history of the world” against Iran, with more details due Aug. 24.
- Bessent warned that countries, banks, firms and shippers continuing to transfer money, buy oil or transport goods for Iran could face US enforcement action.
- Iran has restricted the Strait of Hormuz since the war began in February, disrupting a route that carried about 20% of the world’s oil and liquefied natural gas, according to the BBC.
US Treasury Secretary Scott Bessent says Washington is preparing what he called the toughest sanctions in history against Iran, warning allies and trading partners that they could face penalties if they continue doing business with Tehran.
“We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” Bessent told CNBC. “You are either with us or against us.”
His remarks followed President Donald Trump’s pledge to launch “the most crushing economic operation ever taken against any country” against Iran. Trump also warned that countries providing “any type of lifeline” to the Iranian government would face “tremendous economic consequences.”
Bessent did not spell out the full package of measures, saying more details would be announced at a press conference on Aug. 24. But he described the plan as “the greatest co-ordinated economic isolation in the history of the world” and said it would combine new sanctions with an existing blockade on Iran.
“It is a one-two punch. We have the blockade, and we are going to have the toughest sanctions in history,” he said, according to Al Jazeera. “It is going to work in Iran, and we are going to collapse this regime.”
Bessent said Washington would pursue foreign banks, companies and shippers that continue to move Iranian money, oil or goods. “If you insist on doing business with them — either transferring money, buying oil, doing seaborne ship transport — then the US Treasury and the US government, they will put its full might and force towards enforcing against you,” he said.
Asked whether the measures could target China, Bessent declined to answer directly, saying some conversations were better held “in private,” Al Jazeera reported. He said countries had a shared interest in pressuring Iran because of the economic damage caused by restrictions on the Strait of Hormuz, a key waterway for Middle Eastern energy exports.
Iran has largely closed or restricted passage through the Strait of Hormuz since the war began in February, disrupting a route that had carried about 20% of the world’s oil and liquefied natural gas, according to the BBC. Al Jazeera reported that global oil prices have risen since the start of the conflict and that reopening the strait has become a key US goal in ceasefire talks.
The US and Israel launched attacks on Iran in February, saying the strikes were intended to stop Tehran from developing nuclear weapons, a charge Iran has consistently denied. Iran responded by attacking Israel, US bases across the Middle East and Gulf Arab allies of Washington.
The US and Iran agreed to ceasefires in April and June aimed at facilitating negotiations to end the conflict, but the BBC reported that the truces have been repeatedly broken and talks appear to have stalled.
The latest sanctions threat comes after earlier US efforts to squeeze Tehran’s finances. In April, Washington launched sanctions on foreign banks and firms doing business with Iran after military operations did not lead to the overthrow or surrender of the Iranian government, the BBC reported. The Treasury Department and Pentagon also announced Operation Economic Fury, aimed at cutting off Iranian revenue streams and degrading Tehran’s ability to fight.
The BBC reported that a June memorandum of understanding between Iran and the US included a clause stating that Washington would “terminate all types of sanctions” against Iran on an agreed schedule.
Iran’s economy has already been strained by decades of international sanctions. Official figures cited by the BBC show that in the 12 months to February 2026, prices for basic necessities rose by an average of 60%, while food prices doubled. Earlier this year, protests broke out over inflation and the cost of living.
Some Iranians questioned whether another round of sanctions would bring the government down. “There may be an impact at first, but that doesn’t necessarily mean Iran won’t be able to overcome the crisis,” one resident of Khuzestan province told the BBC.
Another resident told Middle East Lifeline: “Iran has been living under sanctions for years, and people have become accustomed to this situation. I’m sure Iran will find other ways to continue trading.”
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