Three days ago, Iran Unfiltered argued that Washington’s shift toward economic warfare was an attempt to accomplish through financial pressure what nearly six months of military operations had failed to achieve: forcing Tehran to accept U.S. terms. As the Trump administration prepares to unveil its new sanctions campaign Monday, the contours of that confrontation are becoming clearer, and considerably more dangerous.
The Iranian rial has already fallen to a new record low, with the U.S. dollar crossing 2 million rials, or 200,000 tomans, on the open market as Iranians brace for the next round of U.S. economic measures. The timing is significant because the details of the new sanctions have not yet been announced. Fear of what comes next is already pushing households toward dollars and gold in an effort to protect their savings. Central Bank Governor Abdolnaser Hemmati sought to calm the market Monday, describing the latest jump as temporary and partly driven by the publicity surrounding the U.S. campaign.
But the vulnerability Washington is targeting is real. Iran enters this new phase with high inflation, severely constrained maritime commerce and an economy already weakened by years of sanctions and six months of war. A sustained decline in the rial quickly feeds into higher prices for imported goods, medicine and other necessities. The first effects of Washington’s new economic offensive are therefore reaching ordinary Iranians before the offensive itself has even been fully unveiled.
Treasury Secretary Scott Bessent has made clear that the campaign is intended to go considerably further than adding more Iranian individuals and companies to U.S. sanctions lists. Writing in the Financial Times, Bessent described Monday as an “Economic D-Day,” called the confrontation with Iran the “final phase,” and said Washington intends to cut the remaining economic lifelines sustaining Tehran. President Donald Trump reinforced that message Monday, declaring that Iran is “totally collapsing.”
The most consequential part of the strategy may be its focus on everyone outside Iran who continues doing business with it. Washington is threatening intensified economic consequences for countries, companies and financial institutions that facilitate Iranian commerce. The real test of the new campaign, then, may not be how much more of Iran the United States can sanction, but how effectively it can force the rest of the world to stop trading with Iran.
That puts China directly at the center of the confrontation. China has long been the principal destination for sanctioned Iranian oil and remains Tehran’s most important economic escape valve. Iranian oil exports to China reportedly fell to roughly 534,000 barrels per day in August, but independent Chinese refiners continue purchasing Iranian crude and payment channels involving the yuan remain active.
Beijing’s response Monday was notably sharper than its earlier general objections to sanctions. Chinese Foreign Ministry spokesperson Lin Jian said China was closely following developments and would take “necessary measures” to protect its legitimate rights and interests, while warning that sanctions and pressure would not resolve the conflict and could instead intensify it.
That creates a potentially much larger test for Washington. Secondary sanctions are most effective when foreign governments, banks and companies conclude that access to the U.S. financial system matters more than commerce with the sanctioned country. Applying that logic to smaller Iranian trading partners is one thing; applying it to the world’s second-largest economy is another. If Washington seriously targets Chinese refiners, banks or other institutions involved in Iranian oil trade, the Iran pressure campaign could destabilize the broader U.S.-China economic relationship. If it does not, Tehran may retain one of the most important channels through which it has mitigated the impacts of previous sanctions.
Iran, meanwhile, is making clear that it does not intend to treat the new campaign as a purely economic contest. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, issued one of Tehran’s strongest warnings yet, saying neighboring countries that participate in Washington’s economic campaign would be treated as enemies. He said Tehran would first try to persuade them not to participate, but warned that if they continued, Iran could target their interests.
Most significantly, Rezaei threatened that if regional countries join what Tehran calls Washington’s “economic war,” Iran would prevent “a single drop of oil” from leaving the Persian Gulf. This vow could implicate not only the Strait of Hormuz, but potentially alternative export routes as well. Iran has not carried out that broader threat, and Rezaei simultaneously insisted Tehran does not seek to expand the war. But his warning explicitly connects Washington’s secondary-sanctions strategy to the security of Gulf energy infrastructure.
Iran is effectively signaling that if Washington tries to turn its neighbors into participants in an economic siege, Tehran may treat their cooperation as participation in the war itself. That leaves Gulf governments caught between American economic power and Iran’s ability to further threaten energy infrastructure in their immediate neighborhood.
The threat carries additional weight because the Strait of Hormuz remains far from normal. Kpler data indicate that only 13 vessels crossed the Strait on Saturday and four on Sunday, although the real number could be somewhat higher because some vessels travel without transmitting normal tracking signals. Iran has also warned ships against crossing without its authorization, while Iran’s Persian Gulf Strait authority - designed to oversee the waterway - has reportedly identified dozens of vessels as violators and warned that ships ignoring Iranian orders could face future fines, detention and confiscation.
Rezaei said Iran considers the Strait effectively closed and will not reopen it until Washington changes its behavior. He also warned that Iran would change the way it fights in any future round of military confrontation, saying the lessons of the past year would be incorporated into a different approach to warfare and that Iranian forces remain prepared for additional operations if escalation continues.
His comments on the nuclear issue were similarly striking. Rezaei argued that the U.S. attack had demonstrated the weakness of international nonproliferation guarantees and rhetorically questioned why countries should refrain from pursuing nuclear weapons if membership in the NPT and acceptance of international inspections do not protect them from military attack. His remarks are not evidence that Iran has decided to build a nuclear weapon, but coming from the secretary of the Supreme National Security Council, they illustrate how war and economic pressure may be affecting Iran’s internal debate over deterrence and the value of remaining within existing nuclear constraints.
All of this is unfolding while the regional military confrontation remains unresolved. Commercial traffic through one of the world’s most important energy corridors is still drastically reduced, Iran and the United States continue exchanging threats, Tehran is warning Gulf states against joining Washington’s campaign, and the possibility of renewed military escalation has not disappeared. The economic offensive is therefore not replacing the war so much as adding another potentially destabilizing layer to it.
Yet at precisely the same moment, diplomacy is also moving. Pakistani Army Chief Field Marshal Asim Munir arrived in Tehran Monday, his fourth visit in less than six months. Pakistan’s military described the trip as an effort to advance a peaceful, sustainable resolution to the conflict, while Iranian state media have increasingly portrayed Pakistan as an important channel between Tehran and Washington. Omani Foreign Minister Badr Albusaidi is expected in Tehran Tuesday as well, with Oman already involved in discussions over navigation through the Strait of Hormuz and historically serving as an intermediary between Iran and the United States.
President Masoud Pezeshkian has also repeatedly argued in recent days that Iran should find a way out of the current “neither war nor peace” situation. He has defended the earlier Islamabad understanding with Washington and argued that Iran should seek to end the conflict while it can still do so from what he describes as a position of strength and dignity.
The contrast is striking: Washington is preparing its most ambitious economic escalation yet, Tehran is threatening to widen the economic confrontation into a regional energy crisis and China is signaling that it will resist U.S. pressure. Yet, at exactly the same moment, Pakistan and Oman are trying to preserve the diplomatic path.
Maximum-pressure sanctions after the U.S. withdrawal from the nuclear agreement in 2018 inflicted enormous economic costs on Iran. They reduced oil exports, weakened the rial, drove inflation higher and damaged household purchasing power. But they did not produce the political capitulation Washington sought. The new campaign begins from a much more fragile baseline: Iran has endured not just the maximum pressure campaign launched eight years ago, but six months of war and a new naval blockade. Washington is now once again explicitly threatening the countries and institutions that provide Tehran with access to international commerce.
That means the new strategy could inflict significant damage. The rial’s plunge beyond 200,000 tomans may be the first warning of how quickly ordinary Iranians could bear those costs. But China’s response and Tehran’s threats also demonstrate why the consequences may extend far beyond Iran’s domestic economy.
The central question remains unchanged: what is all this pressure ultimately intended to achieve? Economic pressure could strengthen the argument inside Iran for reaching an agreement sooner, particularly as the costs of continued confrontation become harder for the government and ordinary households to absorb. The parallel diplomatic activity involving Pakistan and Oman suggests that an off-ramp has not disappeared.
The real strategic change, therefore, would not be moving from bombs to sanctions. It would be using whatever leverage Washington believes it has gained to move from demanding surrender toward demanding a deal that Iran can accept. Without that change, “Economic D-Day” risks becoming another escalation in a war that neither side has been able to win, with Iran’s population, regional energy security and a much wider set of international relationships once again caught in the middle.