Iran faces ‘greatest financial offensive ever’, says US treasury secretary

US Treasury Secretary Scott Bessent has warned Iran of "the single greatest financial offensive ever" as the US-Israel war with Iran reportedly enters its final stages. Bessent stated that the US would sever all economic ties with Iran in an "economic D-Day", isolating any nation that partners with Iran financially. The threat comes after several U-turns and extended deadlines from the Trump administration's previous warnings.

Iran has responded by threatening to shut down all oil exports from the region if the war continues, and has issued a new warning to shipping vessels not to pass through the Strait of Hormuz without its permission, Reuters reported. One fifth of the world's oil and gas typically passes through this waterway, which has been effectively blocked by Iran since February.

Bessent's comments, made in a Financial Times opinion piece, did not specify the details of the economic pressure to be imposed on Iran, but he is expected to elaborate in an upcoming press conference. The US has made numerous threats to Iran throughout its ongoing conflict, including Trump's April 2020 statement that "a whole civilization will die tonight" unless Iran agrees to end the war and unblock the Strait of Hormuz.

The economic consequences of the Iran war are being felt worldwide, with higher oil prices contributing to concerns over the cost of living, particularly in the US where gasoline prices have surpassed $4 per gallon. The US government has also intervened in bond markets to buy back more government debt in an attempt to boost bond demand and lower borrowing rates.

However, these measures proved short-lived as borrowing costs rose again the following day. Iran already faces stringent economic sanctions from the US, which imposed them following Trump's withdrawal from the 2015 nuclear deal and reimposition of sanctions in 2018. Biden's administration has attempted to reinstate the Obama-era deal but has thus far been unsuccessful.

In April, the Trump administration imposed additional sanctions on foreign banks and firms engaging in business with Tehran after the military operations failed to compel Iran to surrender.