President Donald Trump has pledged to aggressively target Iran’s economy, following treasury secretary Scott Bessent’s announcement of unprecedented measures set to be implemented by next week.
Bessent is slated to provide further details at a press briefing scheduled for 4am AEST this Tuesday.
For decades, the United States, along with the United Nations and the European Union, has utilized sanctions, trade restrictions, and asset freezes against Iran, originating from actions taken since the late 1970s.
With the onset of a US-Israel coordinated campaign against Iran in February, Washington has escalated its maritime, energy, and financial restrictions, while also initiating a naval blockade.
Iran, enduring decades of severe sanctions, has condemned the anticipated US sanctions announcement, cautioning nations against taking part in what it describes as America’s “economic war” on the country.
Washington has pushed its allies to jump aboard Trump’s new campaign to isolate the Iranian economy, as the US president’s unpopular war drags toward the six-month mark.
“We declare to all countries … do not join the economic war waged by the United States,” said Mohsen Rezai, the head of Iran’s supreme national security council, on Iranian television.
“Any country participating in the imposition of economic restrictions against us is considered an enemy.”
Data from the US treasury department’s Office of Foreign Assets Control (OFAC) shows the agency has imposed sanctions on more than 1,000 people, vessels and aircraft since Trump began his second term.
Recent measures have targeted Iran’s shadow oil fleet; shipping insurers; entities and people enabling Iran’s acquisition of weapons; and digital exchanges, freezing an estimated US$500 billion ($697 billion) in Iran-linked cryptocurrency.
Oil shipments are at a virtual standstill in the Strait of Hormuz, with Tehran threatening to strike any unauthorised oil tankers that try to transit the vital waterway.
Experts say the Trump administration can try the following options to put more pressure on Iran:
Sanctions on Chinese ‘teapot’ refiners
Chinese independent refineries known as “teapots” account for a quarter of Chinese refinery capacity. They operate with narrow and sometimes negative profit margins.
China buys more than 80 per cent of Iran’s shipped oil, according to 2025 data from analytics firm Kpler. Independent refiners absorb much of this trade, exposing them to so-called secondary measures that penalise entities helping a primary sanctions target.
Past US sanctions have deterred larger independent refiners from buying Iranian oil. But the independent refineries are somewhat immune since they have little exposure to the US financial system, sanctions experts say.
Sanctions on Chinese banks
OFAC has imposed secondary sanctions on smaller China- and Hong Kong-based entities accused of processing billions of dollars in Iranian oil and helping to fund weapons procurement.
The US treasury department has warned two larger Chinese banks they could face secondary sanctions if Iranian funds were found moving through their systems, but has stopped short of designating them.
Hitting those two banks, which US officials have not publicly identified, or imposing other sanctions could have a chilling effect on bigger financial institutions, sanctions experts said, although they warned it could also trigger retaliatory actions by Beijing.
Trump administration officials have sought to play down tensions between Washington and Beijing ahead of an expected meeting between Trump and President Xi Jinping later this year. They worry that China could curtail exports of critical minerals that are essential to advanced technology production at a time when the US and Western allies are still trying to develop their own supplies.
‘Whack-a-mole’
The United States could continue targeting Iranian individuals and entities, as well as others in China and the Gulf, that are helping Tehran evade sanctions to collect revenues for its war effort.
The US treasury department recently issued sanctions against firms that are springing up to facilitate Iran’s trading of oil revenue for imports. But such measures amount to a “whack-a-mole” approach that has not altered Iran’s approach, said Brett Erickson, managing principal of Obsidian Risk Advisors, noting that Tehran simply creates new entities to replace them.
Miad Maleki, a sanctions expert with the Foundation for Defense of Democracies, said Bessent was likely signalling a sharpened enforcement push against oil shippers, purchasers and currency exchangers who help Iran pay for its imports.
Further aviation sanctions were also possible, aimed at degrading Iran’s ability to move trade now that the US has blockaded shipping via the Strait of Hormuz, he added.
Land blockade
Some US and Israeli officials have floated the prospect of a land blockade, which would require assistance from Iran’s neighbours: Iraq, Türkiye, Pakistan, Afghanistan, Turkmenistan, Azerbaijan and Armenia.
The Trump administration has varying degrees of closeness with all those countries except Afghanistan, but that border is mountainous and extremely difficult to patrol anyway.
Trump may have leverage over Pakistan, which recently sought a US$10 billion ($13.5 billion) currency swap line from US treasury, and Türkiye, which is seeking to rejoin the US F-35 warplane program.
A land blockade could increase pressure on the Iranian people by halting imports of food, energy, and textiles, but experts say such a move would be difficult to execute and might not spark protests or internal pressure.
Secondary tariffs
Trump has repeatedly threatened tariffs on goods from countries that do business with Iran, although the US Supreme Court struck down the legal basis for such taxes.
The US Senate passed a sweeping Russia sanctions bill last week that included new Iran sanctions and would give Trump new tariff powers that he could potentially use against countries that aid Iran’s commerce and weapons procurement.
That legislation must still pass the US House of Representatives, which could prove challenging given widespread concerns among Democrats and some Republicans about the tariff measures.