The US has dubbed its latest sanctions “Operation Economic Outcast” and described them as an “economic D-Day” against Iran.
It comes almost six months after the start of the Iran war.
The conflict has since led to hikes in oil prices worldwide, with Tehran effectively blocking exports through the Strait of Hormuz – a waterway vital to the global economy. The US has also slowed traffic via its own naval blockade.
Recent attempts to end the conflict via diplomacy have failed, and a 60-day ceasefire formally expired last week with no sign of a settlement.
With the announcement of new sanctions, the US treasury secretary claimed America was “no longer managing the Iranian threat, we are ending it”.
Iran is already under heavy sanctions from the US, but Bessent said these go further.
He said the Treasury had mapped financial channels, facilitators and networks used by Iran to evade sanctions to trade oil, imposing sanctions on almost 60 entities, individuals and vessels.
But analysts had cast doubt on the latest measures even before China’s response.
David Oxley, chief climate and commodities economist at Capital Economics, told the BBC the direct impact on Iran’s energy revenues would be “somewhat of a damp squib”.
“We suspect that the new package will have only a limited direct impact on Iranian energy flows in the short term,” he added.
This is partly due to the fact roughly 90% of Iran’s oil goes to China, he said, “which has not recognised US sanctions in the past and is unlikely to be cowed this time either”.
Ali Vaez, deputy director of the Middle East and North Africa Program at the International Crisis Group, said: “Generally, the Chinese are against unilateral sanctions. They would comply with multilateral or international sanctions, but unilateral sanctions just imposed by the US – they have always seen that as illegitimate.”
And although Iran’s neighbours like Pakistan, Turkey and Iraq want to maintain good relationships with the US, they “can’t really afford to cut off ties with Iran”, Vaez told BBC Radio 4’s Today programme.
He said putting economic pressure on Tehran “doesn’t work” because the Iranian regime is willing to “absorb any pain” and pass it onto the people.
Other trade partners that could be affected by the US announcement include India and Russia, who have not yet responded.
