Iran has vowed to retaliate against new U.S. sanctions designed to isolate its economy, expressing confidence that major trading partners will resist Washington’s pressure tactics. Treasury Secretary Scott Bessent introduced the measures, which fell short of the harshest sanctions, almost six months into the ongoing conflict that has proven challenging for the U.S.
Despite facing long-standing U.S. and international sanctions that have severely impacted its economy, Iran’s leadership remains undeterred. In response to the latest economic measures, Iran threatened potential military action and further cuts in oil exports from the Gulf. Iranian Economy Minister Ali Madanizadeh affirmed Iran’s readiness and stated that their defense stance is becoming less defensive, warning enemies to expect an offensive move. He also noted that neither China nor Russia had endorsed the U.S. sanctions, and he anticipated resistance from other countries.
Brig.-Gen. Hossein Mohebbi, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, pledged significant retaliation against U.S. vital interests and energy chokepoints if Iran’s infrastructure is jeopardized, as reported by Press TV. The announcement coincided with Iran’s rial hitting a record low, with the currency already under strain due to double-digit inflation and negative growth before the conflict erupted.
The impact of the war is being felt by Iranians, with essential goods becoming increasingly unaffordable. Prices of rice have surged by about 60 percent, while beef costs have risen over 150 percent. The International Monetary Fund projects a contraction of more than five percent in Iran’s gross domestic product.
President Trump’s recent social media post declaring that “IRAN IS COMPLETELY COLLAPSING!!!” contrasts sharply with his earlier message of offering assistance to Iranian protesters during demonstrations against corruption and economic conditions. The situation further escalated with Iran and the U.S. signing an interim deal in June, aimed at resolving the conflict triggered by U.S. and Israeli attacks on Iran in February.
While warning that countries continuing to trade with Iran risk being excluded from the dollar-based financial system, Bessent refrained from specifying a timeline or identifying potential targets, preferring to allow them time to comply with the new directive. The Treasury Department did announce sanctions on 60 individuals, entities, and vessels, but notable Chinese financial institutions suspected of aiding Iran’s oil trade were conspicuously absent.
China, a significant buyer of Iranian oil, asserted that its cooperation with Iran adheres to international law and should not be disrupted. Despite the sanctions, oil prices declined for a second day, although concerns persist over Iran’s ability to disrupt shipping. An oil tanker incident near Oman further highlighted the ongoing tensions and risks in the region.
Efforts to find a diplomatic solution to the conflict remain elusive, with no significant progress towards de-escalation and uncertainty surrounding Iran’s nuclear program. Pakistan reported making strides in talks with Iran aimed at preventing further escalation and reopening the crucial Strait of Hormuz. The conflict has resulted in significant casualties, primarily in Iran and Lebanon, while Iran’s military capabilities have been weakened, its economy is under strain, and key figures, including Ayatollah Ali Khamenei, have faced repercussions.