Iran vows to retaliate after US widens sanctions
Yasmine Ghania and David Lawder |
Iran has promised to retaliate against expanded US economic sanctions the Americans said will cut off Iran’s economic lifeline, with Tehran expressing confidence that major trading partners will resist Washington’s pressure campaign.
US Treasury Secretary Scott Bessent unveiled the measures on Monday but stopped short of the most punishing sanctions, saying countries that continued trading with Iran risked being forced out of the dollar-based financial system.
Bessent declined to identify the countries that would be targeted or reveal when those penalties would take effect, saying he would instead provide them time to comply with the new directive.
The Treasury Department did announce new sanctions on 60 individuals, entities and vessels, but the list did not include any of the Chinese financial institutions suspected of facilitating Iran’s oil trade.
Before the announcement, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in response to any US economic measures.
Afterward, Iranian Economy Minister Ali Madanizadeh said, “We are fully prepared for the US sanctions.”
“Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know how to play the game. Our defence is no longer so defensive; the enemies should wait for an attack,” Madanizadeh told state television.
He also said neither China nor Russia had “accepted” the US measures, and predicted other countries would resist them.
Struggling to resolve an unpopular war that has pushed energy prices higher, the administration of President Donald Trump appears to be counting on further economic pressure even though Iran has spent decades under layers of US and international sanctions that have battered its economy but have not deterred its leadership.
Though neither side has launched major strikes in weeks, the war shows little sign of reaching a diplomatic solution. In the meantime the US is seeking new ways to end Iranian attacks on ships in the Gulf and, more recently via its allies, in the Red Sea.
Almost six months have passed since the US and Israel launched strikes on Iran.
While the war has degraded much of Iran’s conventional military capacity, inflicted economic pain and killed then-Supreme Leader Ayatollah Ali Khamenei, Iran has preserved enough missile and drone capability to attack its Gulf neighbours and threaten oil tankers in the Strait of Hormuz.
The exact state of Iran’s nuclear program, which the Americans and Israelis aim to wipe out, remains unknown.
Thousands of people have died, most of them in Iran and Lebanon. Despite Monday’s announcement, oil prices fell more than $US2 ($A2.80) a barrel on Monday, though investors braced for the prospect of further supply disruptions from the Middle East.
Asked why he stopped short of actually imposing penalties on Iran and declined to identify the countries that would be targeted, Bessent responded, “Why would I want to blow up the global financial system?”
He said he wanted to give countries and companies time to sever ties. Bessent previously urged co-operation from China, the biggest buyer of Iranian oil for several years, although the US blockade of Iran’s ports, renewed in mid-July, has already cut Iranian oil flows to China.
Amid the sabre-rattling, Pakistani army chief Asim Munir visited Iranian President Masoud Pezeshkian in Tehran on Monday in a peace mission that came after Munir spoke with Trump last week, according to three Pakistani sources. Trump initiated the conversation, two sources said.
“The United States must correct its tone and approach in interacting with Iran, because relying on coercion and bullying will only complicate the processes,” Iranian state media quoted Pezshkian as telling Munir.
Pakistan’s earlier mediation efforts between the US and Iran resulted in an interim peace agreement signed in June, but the Islamabad Memorandum quickly faltered.
Reuters