Nearly six months into the US-Israel military campaign against Iran, Washington is shifting its strategy toward a massive financial offensive. US Treasury Secretary Scott Bessent announced on Monday the launch of “Operation Economic Outcast,” a campaign designed to choke off Iran’s remaining revenue streams while threatening severe penalties for any international entities that continue to conduct business with the country.
Bessent characterized this new phase as “the single greatest financial offensive ever” directed at Tehran, labeling the measures as an “economic D-Day.” He issued a stark warning to global banks and corporations, stating, “No one is above the reach of US sanctions,” and cautioned that any institution refusing to cooperate would face isolation alongside Iran.
The Treasury has already moved to enforce these threats, imposing specific sanctions on 60 entities, vessels, and individuals across Switzerland, Singapore, China, Hong Kong, and the United Arab Emirates. These targets are accused of facilitating Iranian trade and helping the regime convert oil exports into usable revenue. Washington has also signaled that Tehran’s trading partners face the risk of secondary sanctions if they persist in these activities.
The move has drawn a sharp response from Tehran. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, issued a stern warning last week: if surrounding nations join the American economic war, “not a drop of oil will leave the Persian Gulf and the strait of Hormuz.” This threat carries significant weight, as the waterway serves as a transit point for one-fifth of the world’s oil and natural gas.
For Gulf states, the situation presents a precarious paradox. While the US military presence provides a necessary shield against Iranian missiles and drones, it also draws these nations into a direct confrontation with Tehran. Analysts note that while the UAE has moved to decisively sever economic ties, other regional powers like Saudi Arabia, Qatar, and Oman are navigating a more cautious path, wary of the instability that could follow a total collapse of the Iranian government.
Mostafa Khoshcheschm, an Iranian political analyst, dismissed the new US measures as a “political show” intended to intimidate neighbors. He compared the current strategy to the “maximum pressure” campaign during Donald Trump’s first term, which aimed to force a renegotiation of the JCPOA nuclear deal but ultimately failed. Khoshcheschm argued that these latest measures are even weaker than the previous attempts.
Despite this, Washington maintains that its economic calculus is sound. Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, explained that the US believes rerouting maritime traffic through Oman and shifting global reliance away from Gulf oil has diminished Iran’s leverage. From Washington’s perspective, the status quo imposes higher costs on Iran than on the United States, leading to the belief that time is now working in the US favor.
The effectiveness of this strategy, however, remains contingent on whether major global economies like China, India, and Russia will comply with the US demands. Meanwhile, regional experts suggest that Gulf states will continue to advocate for diplomacy over further hostilities. Rashid al-Mohannad of the Doha-based Center for International Policy Research noted that recent diplomatic activity, including a visit to Tehran by Oman’s foreign minister, indicates a clear desire among regional mediators to de-escalate.
The UAE’s recent decision to end trade with Iran marks a significant departure from its neighbors. Simon Mabon, a professor at Lancaster University, noted that the UAE’s position is driven by its status as a signatory to the Abraham Accords and its recent experiences as a primary target of Iranian aggression. Miad Maleki, an analyst at the Foundation for Defense of Democracies, added that a comprehensive UAE trade cutoff is particularly impactful because Dubai has historically served as a critical gateway for Iran’s access to foreign currency.
As the conflict continues, the disruption to energy exports in the Strait of Hormuz has already driven up gas prices in the United States, creating domestic political pressure. Whether the US can sustain this “economic D-Day” without triggering a broader regional conflagration remains the central question for the Gulf states, which fear that these sanctions may serve as little more than a gateway to further instability. The report also notes that gulf states have repeatedly found themselves caught in the crosshairs during the US-Iran war as Iran has targeted US military assets and infrastructure in neighbouring countries. The report also notes that economic pressure may appear preferable to another round of US and Israeli missile strikes. The report also notes that the latest wave will target five of Iran’s most important remaining economic lifelines: digital assets, technology, gold, aviation and shipping, while the US and other countries have sanctioned Iran’s oil and financial sectors for decades. The report also notes that that, Khoshcheschm noted, failed – ending with Trump withdrawing the US from the agreement instead in 2018. The report also notes that contrary to Trump’s indications at the start of the war that it would last for a matter of weeks, the ramped-up emphasis on economic pressure comes as months of war have failed to produce a decisive outcome for the US. The report also notes that meanwhile, US media reports that supplies of missiles and air defence interceptors in the Middle East may be running low – vehemently denied by the Trump administration – have incentivised Washington to pursue other means of pressuring Tehran, observers say. The report also notes that he said, has led Trump to believe Washington can afford to wait Tehran out and that, for the first time since the war began, “time is working in America’s favour”, that calculation.
