Operation Economic Outcast

By August 2026, the war between the United States, Israel and Iran had continued for roughly six months without a lasting resolution, and a 60-day window for a ceasefire deal had expired without agreement. The United States had already imposed extensive sanctions on Iran's banking, energy, aviation and cryptocurrency sectors, and had targeted Iran's "shadow oil fleet" and frozen cryptocurrency assets under an earlier initiative referred to as "Operation Economic Fury". On 4 August 2026, Bessent had indicated a deal to reopen the Strait of Hormuz was close, briefly pushing Brent crude down to about $80 per barrel, before the US reverted to a policy of maximum pressure. Iran, for its part, threatened to seize vessels violating transit rules in the Strait of Hormuz, and its top security official Mohsen Rezaee threatened to halt oil flow through the strait entirely should neighbouring countries join the US economic campaign. On 7 August 2026, the Treasury Department had sanctioned Shahr Bank and two Dubai-based exchange houses, Titan Exchange and Alps International, which it alleged had helped Shahr Bank retrieve oil revenue on behalf of major Iranian exporters including the National Iranian Oil Company and Naftiran Intertrade Co., in what officials said was the eighth such Treasury action against Iran since the start of the second Trump administration.

On 19 August 2026, Trump wrote on Truth Social that "oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — it all needs to stop NOW," adding that any country allowing its financial institutions, businesses, airports or government entities to provide "any type of lifeline to Iran will itself face TREMENDOUS economic consequences". He wrote that this would be "an ECONOMIC D-DAY," and called on US allies to help "isolate and defeat the Iran threat".

Bessent reinforced the message in a Financial Times opinion piece published on 23 August 2026, writing "at dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary" and describing the effort as entering its "endgame". He told CNBC the sanctions package would represent the greatest campaign of "coordinated economic isolation in the history of the world" and stated the explicit goal was to "collapse this regime," comparing the intended effect to sanctions previously imposed on Venezuela and Cuba. Bessent said the US would tell allies "you are either with us or against us" and would use its "full might" against countries that continued trading with Iran. The detailed sanctions package was formally unveiled at a Treasury press conference on 24 August 2026.

Analysts noted that squeezing Iran's economy required confronting China, which had been purchasing an estimated 80 to 90 percent of Iran's oil exports before the war, largely through so-called "teapot" refineries. Bessent said Washington had sanctioned smaller Chinese refineries but had not yet taken more escalatory measures against major Chinese banks, and declined to say whether China would be a direct focus of the new measures, noting that "many conversations are best to have in private," ahead of a planned visit to the White House by Chinese leader Xi Jinping the following month.

At a Treasury Department news conference on 24 August 2026, Bessent unveiled the new sanctions package under the name "Operation Economic Outcast," expanding the categories of secondary sanctions to cover digital assets, technology, gold, aviation and shipping, which he said Iran used to generate revenue, evade sanctions or otherwise sustain itself. …

For its relations with Iranian regime Banque Misr in UAE was targeted with secondary sanctions in August 2026.

After 12 years, General License G on August 24 was suspended with Iranian people losing access to international TOEFL, GRE and Duolingo among other things.

On September 4, OFAC sanctioned investment bank Golden Global Yatirim Bankasi Anonim Sirketi based in Istanbul, Turkey.

On September 14, the Treasury Secretary Scott Bessent announced sanctions on VTB Bank over its alleged role in Iranian sanctions evasion. The bank had already been sanctioned in 2022 over the Russian invasion of Ukraine.

On September 17, the FT reported that Mahan Air suspended flights to Muscat and would stop flying to Istanbul and Ankara from September 21. These followed decisions by Turkish and Omani aviation authorities after the US sanctioned 36 targets tied to Iran's aviation sector.

Iranian foreign minister Abbas Araghchi dismissed the campaign as "a diversion from America's own crisis: unprecedented debt & surging interest costs," writing on X that "doubling down on failed policies will only bring further defeat — and enmity of Iranians". Iranian state media described the sanctions threat as an "implicit admission of the enemy's humiliating defeat". Iranian president Masoud Pezeshkian said Iran "cannot continue with war forever" and defended a prior agreement reached with the US in June 2026, despite reported misgivings from Iran's supreme leader Mojtaba Khamenei, reflecting apparent divisions within Iran's leadership over how to proceed.

Following the 24 August announcement, Pezeshkian said the government did not deny that Iran faced economic shortages and argued Iran should end the war now, while still in a position of strength. Iranian parliament speaker and chief negotiator Mohammad Bagher Ghalibaf, speaking to Iranian and Iraqi businessmen in Baghdad, said Iran would not be able to sustain its security without a strong economy, stating "no matter how much military power we have, if people are hungry and we don't have financial circulation," the country's position would be undermined. Iranian leadership more broadly sought to downplay the threat of the new measures while also threatening to retaliate against countries that cooperated with the sanctions, even as several senior officials acknowledged the risk of economic collapse was real. Iran's supreme national security council secretary Mohsen Rezaee said "not a single drop of oil will be exported" from anywhere in the Persian Gulf if the US broadened its economic campaign, and warned that Iran would regard any country's participation in or support for the US campaign as "an act of war".

On 26 August, Araghchi wrote a letter to UN secretary-general Antonio Guterres, the Security Council president, and UN member states, demanding a condemnation of the measures and calling them an "economic terrorism campaign". …