The US' latest effort to apply economic pressure against Tehran announced Monday follows a familiar strategy of threatening punishment against Iran's foreign economic partners.
President Donald Trump's administration "is no longer managing the Iranian threat — we are ending it," Treasury secretary Scott Bessent said Monday in announcing "Operation Economic Outcast", in which Treasury's enforcement arm intends to cut off Iran's financial lifeline to the world.
The measures, which Bessent dubbed "Economic D-Day" for its targeting of Iran's economy, include sanctions against shippers based in the UAE, Singapore and Hong Kong and against six tankers owned by those entities. Treasury's Office of Foreign Assets Control (OFAC) also imposed sanctions on French biofuels plant La Nivernaise De Raffinage and its parent company Wellbred and affiliates in the UAE and Switzerland. OFAC accused Wellbred, which is headquartered in Singapore and trades LPG and oil products, of being under the control of Iranian businessman Mohammad Hossein Shamkhani, whom the US previously accused of trading oil and products on behalf of Tehran.
Wellbred did not immediately comment on OFAC's sanctions designation.
OFAC separately issued new guidance warning of potential sanctions against any entity cooperating with Iran's aviation, digital asset, gold, shipping and technology sectors. OFAC also canceled sanctions waivers allowing Iran's participation in international athletic tournaments and enabling US-Iranian academic exchanges.
OFAC also issued additional warnings against cooperating with the Persian Gulf Strait Authority (PGSA), an entity Tehran established earlier this year to enforce its claim over the management of ship traffic through the strait of Hormuz.
PGSA, in turn, warned on Monday that vessels breaching strait of Hormuz transit rules could face restrictions on future passages, including fines, seizure or confiscation.
Many years of "maximum pressure"
Bessent described Treasury's actions on Monday as "unprecedented" in scope. But Treasury has been targeting energy and other sectors of the Iranian economy non-stop since Trump in May 2019 declared a policy of "maximum economic pressure" against Iran and vowed to reduce the country's crude exports to zero. OFAC has added hundreds of tankers and shipping companies to its sanctions list over their alleged business interactions with Tehran in the past seven years.
China has been the primary economic partner of Iran and the main destination for Iranian crude exports since the imposition of US sanctions against Tehran in 2019. But Bessent did not explicitly outline any new action in the works against Chinese oil buyers and banks dealing with Tehran.
"We want to make clear to here today that no one is above the reach of US sanctions," Bessent said, adding that he expects "a major announcement of a financial institution being sanctioned by the end of this week".
China and Iran held talks on the situation in the Mideast Gulf on Sunday, the Chinese government said, signaling Beijing's continued diplomatic support for Tehran despite the US announcement of a new economic pressure campaign.
Bessent implicitly acknowledged the potential for global turmoil if the US actually makes good on its promise to penalize all entities dealing with Iran.
"Why would I want to blow up the global financial system?" he said. "We believe that it is important to level set and give people a cure period, but they should know that that will move very quickly and that we are serious."
Trump has held talks with foreign leaders to urge them to drastically cut business ties with Iran, Bessent said, without providing any details.
