Iran has stated it is confident it can withstand expanded US sanctions, following Washington's announcement of what it termed an "economic D-Day" aimed at isolating the country from the global economy.
Iranian Economy Minister Ali Madanizadeh declared that Tehran is "fully prepared" for the sanctions, predicting they would result in another "defeat" for the US.
US Treasury Secretary Scott Bessent announced a series of new measures, stating that any nation financially engaged with Iran would face isolation, and that banks and businesses dealing with Iran would share in this isolation if they refused to sever ties.
These actions come after shifts and extended deadlines from the White House in its attempts to resolve the conflict.
Bessent characterized the measures as "the single greatest financial offensive ever" against Iran, intended to "tighten the noose and block every potential source of revenue."
Some economists have expressed skepticism about the effectiveness of the latest sanctions, noting that their impact hinges on the response of Iran's trading partners.
Key among these is China, the largest purchaser of Iranian oil, which has previously disregarded US sanctions and continued its business dealings with Tehran.
Last week, the United Arab Emirates, another significant trading partner for Iran, announced it was ceasing all financial transactions with the country.
However, hours after the US announcement, Iran asserted its confidence in continuing trade with other nations.
Madanizadeh indicated that neither China nor Russia had accepted the US measures, and he anticipated that other countries would also resist them.
"The government is and was ready and has a two-year plan to manage these events," he told state television, adding that Tehran had been "waiting for these plans for a long time."
"We also have our own tools and know how to play the game," he stated.
In response to the US announcement, China voiced strong opposition to what it described as "illegal unilateral sanctions."
Foreign ministry spokesman Lin Jiang asserted that economic pressure tactics would not resolve problems and that Beijing would protect its own interests.
The conflict has led to increases in global oil prices. In response to the latest threat, Iran warned that it would halt all oil exports from the region if the conflict persisted.
According to Reuters, the Iranian regime has also issued a new warning to ships, advising them not to transit the Strait of Hormuz without authorization.
Approximately one-fifth of the world's oil and gas typically passes through the strait, a narrow waterway south of Iran. However, the flow has been effectively obstructed by the country since the conflict began in late February, contributing to higher global oil prices.
At a press conference earlier on Monday, Bessent outlined what was described as "Operation Economic Outcast," stating that the US was initiating an "economic onslaught against Iran's financial connections around the globe."
"Iran now faces a very clear choice with only two paths before them: complete global isolation... or a path back to normalcy with an opportunity to rejoin the global economy," he said.
The treasury secretary claimed that America was "no longer managing the Iranian threat, we are ending it."
Bessent revealed that the Treasury had identified networks, facilitators, and financial channels utilized by Iran to circumvent sanctions and trade oil.
The department announced it had issued determinations against five sectors: digital assets, technology, gold, aviation, and shipping. The Treasury has also imposed sanctions on nearly 60 entities, individuals, and vessels.
In a warning to governments and entities that assist or trade with Iran, he stated they could not "claim they are blind to enabling this activity."
He declined to name specific countries but mentioned that Trump would be contacting world leaders "with specific requests to cease their interactions with the regime."
While he acknowledged the importance of allowing people time to understand the new sanctions, he added: "They should know that we will move very quickly and that we are serious."
Anadolu via Getty Images
The US has announced a raft of measures aimed at isolating Tehran economically
'Damp squib'
David Oxley, chief climate and commodities economist at Capital Economics, expressed doubt regarding the effectiveness of the sanctions announcement.
"With the renewed US naval blockade already strangling Iran's oil exports, the direct impact of 'economic D-Day' on Iran's energy revenues will be somewhat of a damp squib," he stated.
"We suspect that the new package will have only a limited direct impact on Iranian energy flows in the short term."
He attributed this partly to the fact that approximately 90% of Iran's oil is exported to China, a country "which has not recognised US sanctions in the past and is unlikely to be cowed this time either."
"Generally, the Chinese are against unilateral sanctions," said Ali Vaez, deputy director of the Middle East and North Africa Program at the International Crisis Group.
"They would comply with multilateral or international sanctions, but unilateral sanctions just imposed by the US - they have always seen that as illegitimate," he told BBC Radio 4's Today programme.
Furthermore, although Iran's neighbors such as Pakistan, Turkey, and Iraq wish to maintain good relations with the US, they "can't really afford to cut off ties with Iran," Vaez added.
He suggested that applying economic pressure on Tehran "doesn't work" because the Iranian regime is prepared to "absorb any pain" and pass it on to its population.
Throughout the course of the conflict thus far, previous threats have included Trump's statement in April that "a whole civilisation will die tonight" unless Iran agreed to a deal to end the war and unblock the Strait of Hormuz.
The US eventually retracted that position after mediator Pakistan intervened and called for further diplomacy.
The economic repercussions of the Iran war are being felt in the US and globally. Increased oil prices have heightened concerns about the cost of living, with gasoline and diesel prices significantly higher than a year ago.
In the US, gasoline prices have exceeded $4 a gallon, and affordability is a major concern for American voters in the lead-up to the November mid-term elections.
On Monday, a barrel of Brent crude, the global oil price benchmark, was priced at $92.
Last week, Bessent announced that the US government would intervene in the bond markets by repurchasing more government debt to stimulate demand for bonds and lower borrowing rates.
However, the impact of this announcement was short-lived, with long-term borrowing costs bouncing back up a day later.
Iran nuclear deal: What it all means
How much could Trump's 'economic D-Day' hurt Iran?
The Iranian regime is already subject to stringent economic sanctions from the US.
Former US President Barack Obama and several US allies had agreed a deal with the country in 2015 that lifted many sanctions in exchange for Iran agreeing to limit its nuclear program.
However, Trump withdrew from that agreement in 2018, deeming it "defective at its core," and reinstated all US sanctions on Iran.
During Joe Biden's presidency, he made some attempts to reinstate the Obama-era deal, but these efforts were unsuccessful.
In April of this year, the Trump administration initiated a series of sanctions targeting foreign banks and firms doing business with Tehran after it became apparent that its military operations had not compelled Iran's regime to surrender.
