US Launches Operation Economic Outcast: How Secondary Sanctions Target Iran's Global Partners

The United States has launched 'Operation Economic Outcast', announcing a new wave of economic sanctions against Iran and threatening partner countries that engage in trade with Tehran. This move aims to choke the Iranian economy as the ongoing conflict remains deadlocked.

At least 60 entities across the Middle East, Asia, and Europe have been targeted in this latest economic pressure campaign, which risks further disrupting global energy markets and supply chains. The US-Israel war, launched on February 28, has already caused oil price spikes and supply disruptions due to the blockade of the Strait of Hormuz.

US Treasury Secretary Scott Bessent stated that the administration intends to sever all of Iran's revenue sources, including oil, and force international entities to choose between doing business with the US or Iran. This follows a Truth Social post by President Donald Trump warning that any country providing a lifeline to Iran will face severe economic consequences.

Secondary sanctions work by leveraging access to the US market and financial system. Even foreign financial institutions with no direct ties to Iran can face penalties if they process payments for companies trading with Tehran, particularly if those institutions maintain US branches or dollar-clearing ties.

Historically, the US has utilized measures like the 2017 Countering America's Adversaries Through Sanctions Act (CAATSA) to penalize nations trading with sanctioned entities, such as targeting the Equipment Development Department of the Chinese military in 2018 and Turkiye's Presidency of Defence Industries in 2020.

Iran's primary trade partners include China, Iraq, the United Arab Emirates, Turkiye, Afghanistan, and India. However, analysts note that the effectiveness of Washington's leverage against major economies like China and Russia may be limited due to their minimal reliance on the American financial system, with China having purchased 80 percent of Iran's shipped oil in 2025.