US prepares sweeping new Iran sanctions, Bessent says

Treasury Secretary Scott Bessent said intensified economic pressure could reduce the likelihood of renewed large-scale military action, as Washington prepares further measures against Tehran and its trading partnersThe U.S. will impose “the toughest sanctions in history” on Iran, Treasury Secretary Scott Bessent said on Thursday, a focus on economic measures he suggested would lessen the need for new major military operations against Tehran. His statement followed President Donald Trump’s threat a day earlier of “Economic Warfare” and warning of economic consequences against any country that provided “any type of lifeline to Iran”. Oil prices rose to more than a three-week high on Thursday following those U.S. threats of financial penalties aimed at forcing an end to a nearly six-month-old war that has stranded millions of barrels of Middle Eastern oil. “I’m not sure why oil has popped up on this,” Bessent told CNBC. “If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he said, using a term referring to military force. Iran condemns threatened sanctions Thousands have been killed in the conflict, which drew in Gulf nations and shocked markets as Iran flexed its ability to curb shipping through the Strait of Hormuz — a waterway that carried about a fifth of all traded oil before February. The U.S. and Iran have twice announced ceasefire deals, in April and June, aiming to restore the free flow of shipping through Hormuz on a path towards ending the conflict, but both quickly crumbled. Before Bessent spoke, Iran’s foreign ministry said it condemned U.S. economic and trade sanctions, calling them “economic terrorism” that would target ordinary Iranians and amount to crimes against humanity. Bessent told CNBC he would share more details and “talk about exactly what we’re going to do” on Iran at a press conference on Monday. “It is a one-two punch. We have the blockade (on Iran), and we are going to have the toughest sanctions in history,” he added, referring to a U.S. naval blockade imposed on Iran in April and paused for a month in mid-June. “It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” he said. China presents challenge for Washington When asked if the United States could target China for doing business with Iran, Bessent said many conversations were best to have in private. “Keep in mind that the Chinese get 50% (of their) energy from inside from the Gulf. So it would do them a big service to get with the program,” he said. China buys more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler, but engaging in further economic warfare with China, a major exporter to the U.S. including vital rare-earth minerals, risks retaliation against Washington. Decades of economic pressure In a social media message on Wednesday, Trump promised “Economic Warfare and Isolation on an unprecedented scale,” although details were scant. Iran has weathered near-continuous, punishing economic sanctions for nearly 50 years, since the Islamic Revolution of 1979. “ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” Trump wrote. Iranian Foreign Minister Abbas Araqchi called Trump’s comments an attempt to divert American public opinion from domestic financial problems, including record debt and rising interest rates. He said Washington’s insistence on policies he described as failed would bring further failures and alienate Iranians. “America’s economic terrorism threatens the global economy and the national sovereignty of countries around the world,” he said on X. Trump has yet to achieve the objectives he set out at the start of the war: dismantling Iran’s nuclear programme, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their clerical rulers. Trump’s social media threats and announcements do not always get implemented as written. He did not say what specific steps the U.S. would take or name any country, though the warning would appear to extend to U.S. allies that have helped mediate peace talks. Oman urges diplomacy over Hormuz Iran has separately been negotiating an agreement on managing the Strait of Hormuz with Oman and has said several times in recent weeks that an agreement was close. Trump responded on Monday to those negotiations with a threat, warning he might bomb the Gulf state, a longstanding U.S. security partner, if it “gets in the way”. Omani Foreign Minister Badr Albusaidi, speaking after meeting his Japanese counterpart, said on Thursday that lasting security in the strait required a permanent peace in the region and rejected further escalation.