Trump seeks greater economic pressure on Iran: What are his options?

President Donald Trump has declared his intention to intensify economic sanctions against Iran, as reported by Reuters. Treasury Secretary Scott Bessent stated that the United States would introduce unprecedented measures against Tehran within the coming week. The US, UN, and EU have long imposed sanctions on Iran due to its nuclear program, human rights issues, and support for militant groups.

However, since the escalation of the Iran war in February 2026, Washington has expanded its sanctions to include maritime, energy, and financial measures, with the Office of Foreign Assets Control sanctioning over 1,000 individuals, vessels, and aircraft under Trump's second term. Recent sanctions targeted Iran's shadow oil fleet, shipping insurers, and entities linked to Iran's weapons procurement, along with digital exchanges holding an estimated $500 billion in Iran-linked cryptocurrency.

Oil shipments through the Strait of Hormuz have come to a halt, with Iran threatening retaliation against unauthorized tankers attempting passage.

China, as Iran's primary buyer of oil, could potentially be affected by these measures. Chinese independent refineries, referred to as "teapots," account for a quarter of China's refining capacity and operate on tight margins. These refineries transact a significant portion of Iran's oil shipments, making them vulnerable to secondary sanctions.

The Treasury has already imposed secondary sanctions on select China and Hong Kong-based entities involved in processing Iranian oil and weapons funding. The department has warned two larger Chinese banks about potential sanctions if Iranian funds were traced through their systems, though they have not yet been designated. Sanctions experts suggest that targeting these banks could create uncertainty for larger financial institutions but might also provoke a response from Beijing.

Trump administration officials have endeavored to maintain a positive relationship with China, particularly ahead of an upcoming meeting between Trump and Chinese President Xi Jinping. However, the possibility of a "whack-a-mole" approach remains, where the US could continue targeting Iranian individuals and entities, as well as their Chinese counterparts, to disrupt Iran's ability to evade sanctions.

Sanctions experts have noted that this approach has not significantly altered Iran's behavior, as Tehran simply creates new entities to replace the sanctioned ones. Alternative strategies, such as a land blockade, have been discussed, but experts caution that such a move would be challenging to implement and could potentially disrupt the Iranian population's access to essential goods like food, energy, and textiles.