US Imposes New Sanctions on Iran Targeting Oil Revenue and Key Sectors

Reporting based primarily on channelnewsasia.com.

The United States imposed new sanctions on Iran targeting oil revenue, digital assets, technology, gold, aviation, shipping and 60 individuals, entities and vessels, with Treasury Secretary Scott Bessent urging allies to join the measures while warning that continued trade with Tehran risks exclusion from the dollar-based financial system.

US Announces Expanded Sanctions on Iran

US Treasury Secretary Scott Bessent announced that Washington is imposing new sanctions on Tehran to sever all financial support for the regime. [5] The new sanctions target five vital sectors: digital assets, technology, gold, aviation and shipping, alongside oil revenue and 60 entities, vessels and individuals accused of enabling the regime. [5] Bessent urged US allies to support the measures. [5] He stopped short of sanctioning Chinese financial institutions suspected of facilitating Iran's oil trade. [2] Bessent declined to identify countries that would be targeted or reveal when penalties would take effect, saying he would instead provide them time to comply with the new directive. [2] He said he wanted to give countries and companies time to sever ties. [2] Asked why he stopped short of actually imposing penalties on Iran and declined to identify the countries that would be targeted, Bessent responded, "Why would I want to blow up the global financial system?" [2] Bessent said he wanted to make clear that no one is above the reach of US sanctions. [2]

Iran Promises Retaliation

Iran promised to retaliate against the expanded US economic sanctions that the Americans said would cut off Iran's economic lifeline. [2] Tehran expressed confidence that major trading partners would resist Washington's pressure campaign. [2] Iranian Economy Minister Ali Madanizadeh said, "We are fully prepared for the US sanctions." [2] Madanizadeh added, "Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know how to play the game. Our defence is no longer so defensive; the enemies should wait for an attack." [2] He also said neither China nor Russia had "accepted" the US measures, and predicted other countries would resist them. [2] Brigadier General Hossein Mohebbi, a spokesperson for Iran's Islamic Revolutionary Guard Corps, vowed heavy blows to US vital interests and energy chokepoints if Iran's infrastructure is threatened. [2] Before the announcement, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in response to any US economic measures. [2]

Context of Ongoing US-Iran Conflict

Struggling to resolve an unpopular war that has pushed energy prices higher, the administration of President Donald Trump appears to be counting on further economic pressure even though Iran has spent decades under layers of US and international sanctions that have battered its economy but have not deterred its leadership. [2] Though neither side has launched major strikes in weeks, the war shows little sign of reaching a diplomatic solution. [2] In the meantime, the US is seeking new ways to end Iranian attacks on ships in the Gulf and, more recently, via its allies in the Red Sea. [2] Almost six months have passed since the US and Israel launched strikes on Iran. [2] While the war has degraded much of Iran's conventional military capacity, inflicted economic pain and killed then-Supreme Leader Ayatollah Ali Khamenei, Iran has preserved enough missile and drone capability to attack its Gulf neighbours and threaten oil tankers in the Strait of Hormuz. [2] The exact state of Iran's nuclear program, which the Americans and Israelis aim to wipe out, remains unknown. [2] Thousands of people have died, most of them in Iran and Lebanon. [2]

Market and Diplomatic Reactions

Despite Monday's announcement, oil prices fell more than US$2 a barrel on Monday, though investors braced for the prospect of further supply disruptions from the Middle East. [2] The Chinese Foreign Ministry said sanctions and pressure tactics do not help and Beijing would do what was necessary to protect China's interests. [2] Amid the sabre-rattling, Pakistani army chief Asim Munir visited Iranian President Masoud Pezeshkian in Tehran on Monday in a peace mission that came after Munir spoke with Trump last week, according to three Pakistani sources. [2] Trump initiated the conversation, two sources said. [2] "The United States must correct its tone and approach in interacting with Iran, because relying on coercion and bullying will only complicate the processes," Iranian state media quoted Pezeshkian as telling Munir. [2] Pakistan's earlier mediation efforts between the US and Iran resulted in an interim peace agreement signed in June, but the Islamabad Memorandum quickly faltered. [2]

What to watch next: Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between US President Donald Trump and Chinese President Xi Jinping, with any curbs on China's exports of critical minerals especially sensitive. [2]