US Intensifies Economic Pressure on Iran with Expanded Sanctions to Break War Impasse

The US on Monday prepared to broaden the scope of secondary sanctions targeting firms and countries conducting business with Iran. This escalation is part of Washington's strategy to isolate the Iranian economy and break the current deadlock in the ongoing conflict.

According to the White House, the measure serves as a final warning for international partners to sever their commercial ties with Iran as the US intensifies its economic pressure campaign. President Donald Trust's administration has shifted its focus from military operations to economic warfare after initial military campaigns and a naval blockade failed to reopen the Strait of Hormuz, a vital chokepoint handling approximately 20 per cent of global energy supplies.

Treasury Secretary Scott Bessent was scheduled to hold a press conference later on Monday to detail the administration's strategy. In a Financial Times opinion piece, he stated that the ultimate US objective is to “sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone”. Described by Washington as an “economic D-Day”, nations have been warned to align with the US or risk becoming a “global pariah”.

The impact on major trade partners such as China, India, and Turkey—all of which maintain strong business relations with Iran—remains uncertain. However, Mr Bessent specifically targeted nations facilitating Iranian energy exports, financial transfers, aviation, shipping, and banking.

Washington's campaign received external support last week when the UAE announced the termination of trade and financial ties with Tehran, following an incident where two Iranian missiles were fired at the Emirates.

Ahead of the announcement, Iran's currency plummeted to a historic low against the dollar, with the rial dropping 4.5 per cent since Mr Trump previewed the upcoming economic pressure last week. Meanwhile, inflation surpassed 80 per cent for the country's 93 million citizens, and oil shipments have drastically declined, severely reducing government revenue.

“Iran is completely collapsing,” President Donald Trump wrote on Truth Social prior to the announcement. Despite decades of enduring economic sanctions and an effective closure of the Strait of Hormuz, Tehran has vowed to retaliate. Mohsen Rezaee, secretary of Iran’s Supreme National Security Council, stated on X that any nation joining the US economic campaign would be treated as an “enemy,” warning that “not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere” in the Gulf.

Tanker traffic through the Strait of Hormuz has significantly decreased since the US and Israel initiated coordinated strikes against Iran on February 28. Additionally, the UK Maritime Trade Operations reported that a tanker was struck by an unknown projectile west of the Saudi port city of Yanbu, causing a fire on the main deck, though all crew members remained safe with no environmental impact reported.

Diplomatic engagements continued as Pakistan’s army chief Field Marshal Asim Munir arrived in Iran on Monday for talks aimed at promoting regional peace and stability, according to Islamabad. Furthermore, Oman's Foreign Minister Badr Al Busaidi was scheduled to visit Tehran on Tuesday to pursue separate discussions regarding navigation through the waterway, as Washington and Tehran remain deadlocked over conflict resolution.