Trump announced that countries engaging in commerce with Iran would face substantial economic consequences. In a Wednesday post on Truth Social, Trump stated that countries allowing their banks, corporations, airports, or government institutions to process transactions involving Iran would be subject to financial penalties. The policy was characterised by Trump as an economic measure that would require allied nations to join efforts aimed at isolating Iran.
Iranian Foreign Minister Abbas Araghchi responded to the statements, saying they would present the administration with added difficulties as it pursues a settlement to an ongoing dispute. On Thursday, Araghchi posted on X, framing the announcement as a diversion from the nation's internal economic troubles, including its debt burden and borrowing costs. He argued that continuing along the same policy path would produce further resistance among Iranians and renewed setbacks, while also contending that sanctions pose a threat to both global economic stability and national sovereignty.
Washington had previously suspended restrictions on Iranian oil transactions for the duration of a 60-day truce, but those measures were restored after the arrangement broke down over a dispute concerning the Strait of Hormuz the previous month. Over many decades, the United States has maintained a range of restrictive measures against Iran — including asset freezes, trade embargoes, and broader sanctions — in response to concerns about its nuclear programme and human rights record. Following the outbreak of hostilities, the United States established a naval blockade on Iranian oil shipments and introduced further sanctions targeting maritime activity and the energy sector.
Analysts note that while broadening penalties to cover outside parties remains an option, the practical reach of such measures faces constraints. Tightening the application of secondary sanctions against companies, banks, insurers, and shipping operators involved in Iranian oil transactions is the most probable path forward, according to Chatham House energy policy and geopolitics researcher Dr Neil Quilliam. The intention would be to raise the barriers and financial burden for outside entities conducting trade with Iran, regardless of where those entities are headquartered. Dr Quilliam noted that any such steps may fall short without a parallel extension to China.
Data indicate that the outbreak of hostilities translated into financial gains for Iran. According to Fars, a state-affiliated Iranian news outlet, the nation earned $7.5 billion from petroleum exports during the opening four months of the fiscal year. According to the oil ministry, the figures represented earnings one and a half times higher than those recorded over the equivalent period the previous year, with projections indicating the sum would meet the government's foreign currency obligations through the end of the fiscal period. The data could not be confirmed through independent sources.
Strategies such as shadow fleet tankers, offshore storage vessels, and non-traditional port access have allowed the country to reduce the economic pressure of international sanctions. Expanded trade restrictions targeting Iran's economy could heighten the strain, yet Dr Quilliam cautioned that such measures alone would fall short of achieving the desired outcome. Over many years, Iran has developed supply chain workarounds and established access to alternative trading channels to circumvent restrictions.
A more pressing obstacle for Iran would arise if the United States managed to curtail demand for Iranian oil rather than focusing solely on restricting its supply. Beijing absorbs roughly four-fifths of Tehran's oil output, positioning it as a pivotal player in any sanctions architecture. Washington has on multiple occasions named Chinese companies as participants in facilitating Iranian petroleum trade, though imposing broad-ranging sanctions could carry wider economic and diplomatic repercussions. Iran has offered discounted oil prices to Chinese purchasers as a way of offsetting the economic pressure imposed by international sanctions.
According to Dr Quilliam, the effectiveness of Trump's threatened action hinges on whether the administration is willing to pursue not only Iran but also the nations purchasing its exports. Questions persist over whether Washington is prepared to absorb the trade and diplomatic consequences of imposing sanctions on notable buyers — among them those based in China — as well as partner nations like the UAE, a country that cut financial ties on Tuesday yet has long functioned as a channel through which money has reached Iran. Oil transfers and financial flows pass through a number of intermediary territories, among them Iraq, the UAE, Malaysia, Pakistan, Turkey, and countries across Central Asia.
According to Dr Quilliam, while the threat from Trump warrants attention, whether it achieves its intended purpose will hinge on how consistently it is enforced. The Supreme Court has overturned such tariff provisions on multiple prior occasions. Measures available to the administration include placing restrictions on smaller Chinese refineries — which handle roughly a quarter of the country's refining output — alongside actions targeting Chinese financial institutions and the possibility of a land blockade.
The Senate approved legislation last week that paired Russia-related measures with new Iran provisions, while also granting the president authority to impose tariffs on nations that facilitate Tehran's trade and arms acquisition. The bill still faces a vote in the U.S. House of Representatives, where reservations held by members across party lines may complicate its passage. Treasury Secretary Scott Bessent outlined a proposal to impose sweeping new sanctions on Iran. According to Dr Quilliam, while there is scope to intensify restrictions on Iran's petroleum trade and the financial networks underpinning it, rolling out such measures involves extended timelines, meaning any tangible effect would take considerable time to materialise.
