What Bessent’s big move against Iran could look like

Treasury Secretary Scott Bessent has disclosed the US plans to intensify economic pressure on Iran, amidst skepticism from critics due to the country's existing naval blockade and stringent sanctions. The main challenge for the Treasury Department would be targeting remaining options without adversely affecting the US economy. A Bloomberg Economics analyst, Chris Kennedy, suggests that without prioritizing the Iran threat over other issues, particularly China, these actions may not significantly impact Iran's strategies.

Options under consideration include targeting China, which buys over 90% of Iran's oil exports. While the US has already sanctioned some Chinese refineries and firms, it has not yet targeted major Chinese banks involved in these transactions. Hitting foreign companies or financial institutions could strain relations with Beijing prior to an anticipated meeting between President Trump and Chinese leader Xi Jinping. Additionally, curtailing Iranian barrels would potentially elevate oil prices.

Exchange houses in countries like the UAE assist Iran in repatriating funds. The Treasury has already sanctioned some Iranian exchange houses for alleged money laundering activities. However, Iran has developed alternative channels to move money, making the removal of specific intermediaries less effective.

The US could threaten secondary sanctions on entities engaging in limited business with Iran, similar to the approach used against North Korea in 2017. This could force foreign companies and banks to choose between business with Iran and access to the US financial system. Such a move could pressure Russia, China, and US partners like Turkey, which maintain significant commercial ties with Tehran.

Another option involves freezing Iranian government assets already under US jurisdiction, a step the Bush administration took after Iraq's 2003 invasion. However, the pool of such assets may be limited, and confiscating them would be more complex than merely freezing them. Much of Iran's overseas wealth is held in third countries, necessitating foreign cooperation to seize it.