The Trump administration has widened its economic campaign against Iran, warning that countries and companies continuing to trade with Tehran could be excluded from the dollar-based financial system. Iran responded by declaring itself prepared for the restrictions and warning that its reaction may extend beyond defensive economic measures, raising the risk of further disruption to international energy markets.
Washington targets Iran’s remaining trade
President Donald Trump had warned of economic consequences for any country providing what he described as a lifeline to Iran. US Treasury Secretary Scott Bessent subsequently announced measures intended to isolate Tehran from global finance, trade and shipping.
The Treasury Department imposed sanctions on approximately 60 individuals, companies and vessels accused of supporting Iranian oil exports, military programmes or sanctions-evasion networks.
Among the targets were Singapore-based Wellbred Capital and related businesses in the United Arab Emirates, Switzerland and France. US authorities allege that the group is connected to Iranian oil shipping magnate Mohammad Hossein Shamkhani and a network transporting petroleum and other cargo internationally.
Measures stop short of full isolation
Despite the administration’s forceful language, Washington did not immediately impose its most severe available measures. Bessent declined to identify which countries could be penalised or when the restrictions would begin.
Major Chinese financial institutions suspected of facilitating Iranian oil transactions were absent from the sanctions list. Bessent said governments and businesses would be given time to end their commercial relationships with Iran before further action was considered.
The distinction is important. Removing major foreign banks from the dollar system could create serious disruption across global financial markets, particularly if China retaliated.
Iran warns that defence could become offence
Iran’s response came from Economy Minister Ali Madanizadeh, who said the country was fully prepared for the new sanctions and possessed its own economic tools.
He described the American measures as economic terrorism and indicated that Iran’s response would no longer remain entirely defensive. Madanizadeh also predicted that China, Russia and other trading partners would resist Washington’s demands.
Iran’s Islamic Revolutionary Guard Corps separately warned that US interests and important energy routes could face retaliation if Iranian infrastructure were attacked.
China becomes the decisive test
China has been the largest buyer of shipped Iranian oil, accounting for more than 80% of those exports according to 2025 estimates. Washington’s ability to isolate Tehran will therefore depend heavily on whether Chinese refiners, traders and banks comply.
Beijing has rejected unilateral sanctions and said it will protect its economic interests. The Trump administration must consequently balance pressure on Iran against the risk of reopening a broader economic confrontation with China, including possible restrictions on strategically important Chinese mineral exports.
Energy markets remain exposed
The confrontation is particularly dangerous because Iran retains influence over traffic through the Strait of Hormuz. Before the conflict, the waterway carried approximately one-fifth of internationally traded crude oil and liquefied natural gas.
Only two commodity vessels reportedly passed through the strait on Monday, the lowest daily figure since early May. Any further reduction in tanker traffic or direct retaliation against Gulf infrastructure could push energy prices higher and increase inflationary pressure internationally.
Economic pressure carries global risks
The sanctions demonstrate Washington’s attempt to use financial power after months of conflict failed to produce a durable diplomatic settlement. Iran’s economy is already suffering from inflation, currency weakness, damaged infrastructure and restricted oil exports.
However, the effectiveness of the new campaign will depend less on its language than on enforcement. If Washington targets major foreign banks, the economic consequences could extend far beyond Iran. If it does not, Tehran may retain sufficient trading channels to resist the pressure.
Newshub Editorial in Asia – 25 August 2026
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