Iran vows retaliation as US widens economic sanctions

Iran has vowed to retaliate against the United States' expansion of economic sanctions designed to isolate its economy, asserting confidence that key trading partners would resist the pressure campaign and asserting that Washington seeks to rekindle talks. Treasury Secretary Scott Bessent revealed the measures on Monday, though he refrained from implementing the harshest sanctions.

He warned that countries continuing to trade with Iran would risk being expelled from the dollar-based financial system, but did not provide a timeline or specify which nations might be targeted, stating he would grant them time to comply with the new directive. Abbas Golroo, head of the foreign relations committee in Iran's parliament, revealed that Pakistan's army chief Asim Munir delivered a message from the US to Iran on Monday, reportedly indicating that the main objective was to restart the stalled political process.

The Treasury Department announced sanctions on 60 individuals, entities, and vessels, but notably, it did not include any Chinese financial institutions believed to facilitate Iran's oil trade. Bessent emphasized that no one is beyond the reach of US sanctions, directly responding to a question about Chinese banks. China, the primary purchaser of Iranian oil for years, remains a significant buyer despite US port blockades halting Iranian oil shipments to China since mid-July.

Experts warn that the US is cautious of potential Chinese retaliation ahead of upcoming talks between President Donald Trump and Chinese President Xi Jinping. China affirmed today that its cooperation with Iran is within international law and should not be interfered with or disrupted. Oil prices dropped for two consecutive days as traders ignored the sanctions' impact, though market participants remained cautious about Iran's continued ability to disrupt shipping.

An oil tanker was disabled near Oman's Ash Shishah after the latest sanctions were announced. Iranian Economy Minister Ali Madanizadeh declared that Iran is ready to respond, stating that its defenses have shifted from defense to offense; enemies should await an attack. Neither China nor Russia have accepted the US measures, predicting that other countries would resist them.

The latest sanctions have not resulted in major US or Iranian strikes for weeks, but Brigadier General Hossein Mohebbi, a spokesperson for Iran's Islamic Revolutionary Guard Corps, threatened severe consequences to US vital interests and energy chokepoints if Iran's infrastructure is threatened. Iran and the US signed an interim deal in June to end the war that began with US and Israeli attacks in February, but it quickly collapsed, and Iran resumed attacks that have hampered energy exports from the Gulf.

Pakistan's mediation efforts with Tehran aimed at preventing escalation and reopening the Strait of Hormuz showed significant progress, according to a Pakistani military official. An Iranian official reported that Munir's visit yielded valuable diplomatic achievements, though details were not provided, and the New York Times cited a State Department document suggesting that evacuated US diplomats could return to the Middle East as early as this week.

US public support for the war has plummeted to its lowest level since the conflict's early days, with Trump's popularity reaching a record low ahead of November's congressional elections. Oil transit through the Strait of Hormuz has decreased to 5 million barrels per day, down from over 20 million prior to the war, representing roughly one-fifth of global daily consumption.

The conflict has claimed thousands of lives, primarily in Iran and Lebanon, while significantly degrading Iran's conventional military capabilities and leaving its economy struggling. Ayatollah Ali Khamenei, the Supreme Leader, passed away during this period. Despite these challenges, Iran retains the capability to attack Gulf neighbors and threaten oil tankers. The exact status of Iran's nuclear program, the US and Israel's target, remains uncertain.