‘Fully prepared’: Iran threatens tit-for-tat move with oil chokehold as US widens economic sanctions

On Tuesday, Iran issued a warning that it would retaliate against US economic sanctions, which Treasury Secretary Scott Bessent had announced the previous day. The new sanctions aim to cut off Iran's economic lifeline and pressure the country to end the war. However, oil prices did not show a significant immediate reaction, despite a sharp slowdown in shipping through the Strait of Hormuz.

Bessent's sanctions target 60 individuals, entities, and vessels linked to Iran, but major Chinese financial institutions involved in Iran's oil trade were not listed. Iran's leadership dismissed the sanctions, claiming that Washington was struggling to achieve its objectives and that Tehran was fully prepared for the US measures.

Iran also raised the possibility of military retaliation and tightened pressure on shipping through the Strait of Hormuz, blacklisting 45 tankers for alleged violations. US Senator Chris Murphy questioned the effectiveness of the sanctions, arguing that Iran had gained the upper hand and that the US had already sanctioned nearly everything it could.

Oil markets reacted cautiously to the developments, with Brent crude and US WTI crude showing slight gains.