Iran faces new wave of US economic sanctions

Tehran, Iran – Iranians are bracing for more economic hardship as the US prepares to unveil a new round of sanctions against the country. US Treasury Secretary Scott Bessent is expected to announce the new measures on Monday (August 25), aiming to 'strangle' Iran's economy and 'bring down' its government.

President Donald Trump has warned of an 'economic landing,' with the US preparing the strongest financial measures ever imposed on any nation, targeting Iran. However, analysts argue that sanctions are unlikely to change Iran's behavior, which is already one of the most sanctioned countries in the world.

According to Al Jazeera, banks, oil buyers, shipping companies, ports, airports, brokers, shell companies, and even governments facilitating trade with Iran could face secondary sanctions from Washington.

Iran has already been under a US 'maximum pressure' campaign since President Trump's first term in 2018, after the US unilaterally withdrew from the 2015 nuclear deal with world powers. That deal had lifted UN sanctions on Iran in exchange for limits on its nuclear program.

Iran's response and sanctions evasion network

Iran has responded to economic sanctions with a sophisticated evasion network, including a clandestine tanker fleet, ship-to-ship oil transfers, shell companies, and alternative payment and barter mechanisms.

The US naval blockade on Tehran has halted most Iran-linked vessels at southern ports. US Central Command said its forces have diverted 70 commercial ships, disabled 3 vessels, and searched 2 others as part of a blockade that Washington says could last indefinitely.

However, Iran's vast land borders, railway system, and Caspian Sea access in the north give it ample room to circumvent the blockade. Umud Shokri, an energy strategist at George Mason University, noted that Iran has become quite adept at finding ways around US sanctions, though 'surviving doesn't mean avoiding economic damage.'

Iran's rial continued to hit new record lows on Monday, reaching 2.03 million rials per US dollar on Tehran's free market, amid weakening purchasing power.

'Language of force' from Iran

Iran's top military commanders remain defiant and even hint at a tougher approach to deter further US sanctions. Mohsen Rezaei, the new secretary of Iran's Supreme National Security Council, warned that countries supporting the new US measures would be considered enemies of Tehran. He declared: 'If the economic war continues, not a single drop of oil will be exported, whether through the Strait of Hormuz or from anywhere in the Persian Gulf.'

Iran's armed forces chief of staff, Amir Hatami, said his forces are ready to 'fight for 10-20 generations' if necessary. He stressed: 'The only way is to make the US understand through the language of force that they cannot do what they intend to do' in Iran and the Strait of Hormuz.

Meanwhile, President Masoud Pezeshkian has argued it is better to end the fight with the US now from a position of strength. Many others have expressed concern about the conflict's impact on Iran's economy. Another sign of economic strain is frequent power outages in cities and a series of planned austerity measures by the government.

Iran's options under sanctions

In recent years, Iran has boosted trade with China, Russia, and others. It has also relied on local currency use, barter, intermediaries, and discounting to bypass sanctions. Tehran has expanded regional trade via land routes to Iraq, Turkey, Pakistan, the Caucasus, and Central Asia. However, these measures cannot compensate for Iran's lost oil revenue.

Shokri believes China is Tehran's most important economic lifeline due to its large oil imports. Yet even China has limits. He analyzed: 'Beijing can politically oppose US sanctions, but major Chinese banks and highly internationalized companies still avoid transactions that could threaten their access to the US financial system. Smaller refineries and less internationally exposed firms are often more willing to take risks.'

China's foreign ministry said on Monday that sanctions and pressure will escalate tensions rather than resolve conflicts. According to Shokri, Central Asian nations and Azerbaijan could help Iran diversify transport and trade routes, but they lack China's economic scale. 'Therefore, Iran's strongest protection comes from China, while Turkey, Iraq, the UAE, and other regional partners are more likely to reduce exposure if secondary sanctions become credible and costly enough,' he concluded.