The United States announced new sanctions on Iran and a slew of global entities doing business with the country on Monday, in what officials have called an “economic D-Day” and officially dubbed “Operation Economic Outcast”, in an effort to force Tehran to negotiate an end to the war. The announcement followed repeated demands by US President Donald Trump that Iranian leaders take actions like dropping their claims over the Strait of Hormuz and return to talks to end its nuclear programme. Nearly six months into its war on Iran, the US is seeing little impact from its military operations against the country.
Crucial military munitions stocks have been depleted, and important tools used to project power globally have been redirected towards Iran. The long-term implications of the war, analysts say, have pushed the Trump administration to try economic sanctions, but these are unlikely to compel Iran into meeting the demands. So it is hard to describe the war to date as anything but a catastrophic mistake.” While the US has killed key Iranian political and military leaders, Tehran has leveraged its geography and vast arsenal of drones and missiles, striking out at key oil and gas infrastructure in a region that has depended on drawing investors by offering stability.
And Tehran’s choking of traffic through the Strait of Hormuz has brought pain for consumers as far away as the US, who now pay about 40 percent more at the petrol pump than before the war. In late July, the centre found it would take at least three years for the Pentagon to bring supplies back to pre-war levels. The White House has denied any such shortage exists, but analysts say the problem is very real, even if it is temporary, and the Pentagon has been forced to redirect resources away from adversaries like China.
That has included US aircraft carriers. The Pentagon has pulled a key asset away from China, dispatching the USS George Washington from Japan to relieve the USS Abraham Lincoln in the Gulf, whose sailors have been at sea for months longer than planned because of the war. Key US bases in the region – including the Navy’s Fifth Fleet headquarters in Bahrain – have been damaged or become unsafe for use, adding hundreds of kilometres to supply lines as ships look as far away as the Indian Ocean island of Diego Garcia for sourcing.
While the US Department of the Treasury did sanction 60 new individuals and entities from around the globe over their business with Iran, it did not include major Chinese banks or others that help Tehran sell its oil. At least 90 percent of Iran’s crude oil exports end up in China, netting Tehran tens of billions of dollars in revenue. Ending that trade would need the US to confront China far more directly than it is willing to do.
In fact, US Treasury Secretary Scott Bessent admitted exactly that on Monday, when he responded to a question from reporters about why the US did not immediately announce sanctions on Chinese entities long known to facilitate oil trade. Tensions with Washington have already forced Iranians to contend with things like shortages of medicine and higher fuel prices. Many of the new sectors being targeted are crucial for common Iranians looking to find ways around previous sanctions, analysts point out.
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