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U.S. Declares Economic War On Iran

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The United States has shifted its strategy against Iran from military action to economic pressure in a new bid to subdue the Islamic Republic.

On August 24, the U.S. launched ‘Operation Economic Outcast’ against Iran. Treasury Secretary Scott Bessent, who announced the operation, said that the goal is to ‘sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.’

The Treasury blacklisted more than 60 entities, individuals, and vessels worldwide, significantly broadening secondary sanctions risks for any international party continuing to conduct business with Iran.

Following the announcement, Defense Secretary Pete Hegseth said the U.S. is not ruling out using military force.

Iran responded with fire on the very same day. A tanker was struck close to the Strait of Hormuz. The tanker was sailing through the southern U.S.-sponsored route in the waterway, along the coast of Oman.

Despite the escalation, Pakistan’s interior minister, who accompanied the country’s army chief, Asim Munir, on a visit to Iran, reported, on August 25, “significant progress” in talks focused on ending the war.

On the same day, U.S. President Donald Trump claimed in a Truth Social post that a “humanitarian crisis” was developing in the Islamic Republic.

Later, Trump declared, yet again, that all mines in the Strait of Hormuz have been detonated or removed. He also warned Iran against deploying any new mines, hinting that the U.S. could attack Pickaxe Mountain, a suspected nuclear site buried deep underground in the center of the Islamic Republic.

Despite Trump’s latest warnings, it was reported that U.S. Secretary of State Marco Rubio had told counterparts around the world that Washington does not currently expect to carry out new strikes against Iran. However, Rubio did not rule out U.S. military action altogether.

On August 26, Kazem Gharibabadi, Iran’s deputy foreign minister for legal and international affairs, said the Islamic Republic and Oman had agreed on a new temporary route for shipping in the Strait of Hormuz, but insisted that the waterway will not reopen until the U.S. fulfills its commitments under an interim peace deal signed in June.

The very next day, another tanker was targeted near the Strait of Hormuz. The attack proved that Iran was still in complete control over the waterway.

Recent developments fit a pattern that has played out repeatedly since the U.S. and Israel went to war with Iran more than five months ago: a cycle of escalation followed by de-escalation.

Washington’s economic war is unlikely to force Iran into concessions, but it does raise the risk of sparking another limited confrontation. At the same time, a return to all-out war seems unlikely.

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