US warns of ‘economic D-Day’ as Tehran threatens to halt Gulf oil exports

CAIRO/WASHINGTON: The United States has warned Iran of what it described as an unprecedented financial crackdown, ahead of fresh economic sanctions set to take effect Monday targeting countries and entities trading with Iran. In response, Iran said it would halt all oil exports from the Gulf if the “economic war” persists.

US Treasury Secretary Scott Bessent is scheduled to address the press at 1pm EDT (1700 GMT) on Monday, where he is expected to detail additional punitive measures against Iran, a country that has faced near-constant sanctions since its 1979 revolution.

Writing in the Financial Times on Sunday, Bessent described the coming measures as an “economic D-Day,” calling it the most extensive financial offensive ever launched against a single adversary.

While direct military exchanges between the two sides have paused in recent weeks, no substantive negotiations have taken place to resolve the six-month conflict. Since February 28, when the US and Israel launched strikes against Iran, thousands of people, the majority in Iran and Lebanon, have been killed. The campaign severely weakened Iran’s conventional military and dealt a heavy blow to its economy, and also resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei.

But Iran has preserved enough missile and drone capability to attack its Gulf neighbours and threaten oil tankers in the Strait of Hormuz, bringing shipping in the key waterway to a near standstill and pressuring world fuel prices. The exact state of Iran’s nuclear program, which the Americans and Israelis aim to wipe out, remains unknown.

Without detailing specific measures, Bessent signalled the U.S. would target “fearful nations” that practice “appeasement” by engaging with Iran’s economy and financial system.

“They would do well to consider the consequences of sustaining it,” he wrote in the Financial Times.

Iran has been bracing for the sanctions for days, issuing a series of strongly worded statements hinting at a major military response.

Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, on Sunday suggested economic retaliation.

“If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf,” Rezaei wrote on X. “Iran will regard any country’s participation in or support for America’s economic war against the Iranian people as an act of war.”

Bessent previously urged China to cooperate with the U.S., noting China historically has received half of its oil imports from the Gulf region. A spokesperson for China’s embassy in Washington responded with a statement that “sanctions and pressure do not help resolve the problem,” while calling for diplomacy.

Iran’s economy was already under pressure from international sanctions before the U.S. and Israeli attacks destroyed parts of its infrastructure.

Though Tehran remains outwardly defiant, Iranian officials have warned that further economic punishment could increase hardships, reignite unrest and further erode the Islamic Republic’s legitimacy.

Iran entered the war with high inflation, a weakening currency, energy shortages, sanctions and deep structural weaknesses, ​and must now contend with damaged infrastructure, disrupted trade, lost production and the cost of rebuilding.

In the absence of official face-to-face talks between the U.S. and Iran, which were last conducted in June in Switzerland, other nations including Qatar, Pakistan and Turkey have attempted to promote diplomacy.

Iran said Field Marshal Asim Munir, will visit Tehran on Monday as part of efforts to restore peace and security in the region, but gave few details.

Pakistan has been mediating in the conflict and a Pakistani government source said Munir would touch on recent developments including the U.S. threat of new sanctions.

U.S.-Israeli strikes on Iran and Israeli attacks on Lebanon during the war have killed thousands and displaced millions. The U.S. reported 18 military personnel killed and more than 750 wounded.