‘Toughest sanctions in history’: Inside US’ plan for ‘Economic D-Day’ against Iran

The new sanctions package is expected to target not only Iran, but also foreign banks, shipping companies, exchange houses and governments that continue to do business with Tehran nearly six months into the war involving the US, Israel and Iran.

“The Islamic Republic has subsisted by dressing extortion as security guarantees. It has drawn strength from a calculus that regards Iranian retaliation as certain and American enforcement as negotiable. Under President Trump, that era is over. And those who fear the danger of defying Tehran ought not to discount the cost of testing Washington,” Bessent wrote in an X post.

President Trump has dismantled Iran’s military capabilities, destroyed nearly 100 percent of its military factories, and buried its nuclear program.

We are now entering the endgame. At dawn begins an economic D-Day — the single greatest financial offensive ever marshaled against…

— Treasury Secretary Scott Bessent (@SecScottBessent) August 23, 2026

As a result, oil prices fell on Monday as investors weighed the possible impact of the new US measures on Iran and the global oil market. US benchmark West Texas Intermediate futures dropped about 1.3% to $85.93 a barrel, while Brent crude, the global benchmark, fell 1.24% to $93.22 a barrel. 

Bessent calls it a ‘major financial attack’

Bessent gave a preview of the plan in an opinion piece published in the Financial Times on Sunday. He wrote that “at dawn begins an economic D-Day” and described the move as the biggest financial offensive ever put together against an enemy. 

He referred to the 1943 Tehran Conference and said the new campaign comes at a point when Iran’s military has already suffered heavy damage. According to Bessent, the “regime’s final refuge” is now the countries that continue to help Iran get around US sanctions. 

Bessent has spent the past few days preparing the ground for Monday’s announcement. Speaking to CNBC on Thursday, he described the plan as a “one-two punch” that would combine the existing naval blockade with what he called the toughest sanctions ever imposed. 

He also said the pressure could eventually bring down the Iranian government. His argument is that the stronger the economic pressure becomes, the less likely the US will have to return to large-scale military action against Iran. 

Countries doing business with Iran face pressure 

Bessent has also warned countries that continue to send money to Iran, purchase its oil or provide ships for its trade. 

He did not name any country directly, however, he acknowledged that China has been Iran’s biggest buyer of crude, at times purchasing around 90 percent of Iran’s oil during the conflict. 

Bessent did not say whether China itself would be targeted.

That is a sensitive issue for Washington. A major crackdown on Chinese banks could create fresh tensions with Beijing just as Chinese President Xi Jinping is expected to visit the White House next month. The visit would also come ahead of new Chinese restrictions on rare-earth exports that are due to take effect two months later.

Iran rejects US sanctions threat 

Iran has responded to the US plans with strong criticism and has shown little sign of backing down. 

Iranian Foreign Ministry spokesman Esmaeil Baghaei said on X that the sanctions were not simply an economic attack on Iran. He accused Washington of trying to claim authority over other independent UN member states through its sanctions policy. 

Iranian Foreign Minister Abbas Araqchi also criticised the move in a video posted on Telegram. He described the US approach as the same old script and said Washington’s decision to shift from military action back to sanctions showed desperation rather than strength. 

Iran’s security establishment has issued even stronger warnings.

Mohsen Rezaei, the new hardline head of Iran’s Supreme National Security Council, warned neighbouring countries against taking part in the US pressure campaign. He said Iran could respond with “seismic” retaliation if Washington goes ahead with the new measures.

Impact of six months of war on Iran’s economy

The latest sanctions plan comes as Iran’s economy is already under severe pressure.

The war began on February 28, when the US and Israel launched strikes against Iran. Thousands of people have since been killed, while major parts of Iran’s infrastructure have been damaged.

A ceasefire reached earlier in the summer, along with a 14-point memorandum of understanding signed in Islamabad on June 17, has effectively broken down. Talks have stalled over security guarantees and the issue of freedom of navigation through the Strait of Hormuz. 

The war also picked up again between July 8 and July 24. The US carried out strikes inside Iran, while Tehran responded by attacking US facilities in Jordan, Bahrain and Kuwait.

Iran has also continued to effectively block the Strait of Hormuz. It has refused to allow unauthorised tankers to pass through the waterway, which carries around one-fifth of the world’s oil. 

Was Iran already struggling before the latest escalation?

Iran’s economic problems did not begin with the latest phase of the war.

Inflation had crossed 48 percent by late 2025. Independent estimates suggest that between one-fifth and half of Iran’s population is living below the poverty line.

Iran’s finance ministry has also acknowledged malnutrition and unemployment among young men.

The US Treasury has already targeted Iranian exchange houses as part of a related campaign called “Economic Fury”. Washington has accused these firms of helping move billions of dollars in foreign currency through money-laundering networks.

The pressure on Iran has also spread to one of its key trading partners.

The United Arab Emirates stopped trade and financial transactions with Iran last Wednesday after accusing Tehran of firing ballistic missiles at its territory. Iran’s foreign ministry has denied the allegation.

Diplomacy is still going on 

Diplomatic efforts to end the Iran war are still continuing. Pakistan Army chief Field Marshal Asim Munir is visiting Tehran to discuss the Islamabad agreement, Trump’s sanctions plans and a new Pakistan-Turkey-Saudi security deal. Egypt is also in touch with Iran as it tries to help restart US-Iran talks. 

Iranian President Masoud Pezeshkian has said ending the war while Iran can still maintain its dignity would be better than prolonging it. Trump, however, said Washington is waiting to see Iran’s next move and believes Tehran is still not ready for “the right deal.” 

Questions also being raised in Washington

The new US strategy is also facing doubts at home, with Democrats questioning whether Washington’s approach is consistent. Lawmakers have asked Bessent to testify over reports that the Treasury was considering sanctions relief on a large volume of Iranian oil. 

Analysts also say there may be limited room to tighten sanctions further, as Iran already faces a naval blockade and thousands of restrictions. Washington may now have to target Iran’s oil terminals and “shadow fleet” while trying to avoid another shock to global energy markets. 

China could hold the key 

The biggest question ahead of Bessent’s announcement is what China decides to do.

Beijing continues to buy most of Iran’s oil exports, making China one of Tehran’s most important economic lifelines. If China follows Washington’s demands and cuts those purchases, the new sanctions could put much greater pressure on Iran.

But if Beijing refuses and continues buying Iranian oil, the US could face a much bigger confrontation with China.