Iran condemns new US sanctions as 'economic terrorism' amid warnings of retaliation

As the US-Iran war reaches its six-month mark, the Trump administration has launched an "economic D-Day" sanctions campaign, targeting nearly 60 entities and foreign banks like Egypt's Banque Misr. Iran has condemned the measures as "state terrorism" and "economic warfare," warning of "seismic" retaliation, including a total shutdown of oil exports through the Strait of Hormuz. Amid 66% inflation and a 35% drop in foreign trade, Supreme Leader Ayatollah Mojtaba Khamenei has banned actions that harm social cohesion to prevent domestic unrest, while China has vowed to defend its vital oil trade with Tehran.

US sanctions escalation against Iran

• ▪United States Treasury Secretary Scott Bessent announced that the sanctions campaign aims to create the greatest coordinated economic isolation in history against Iran.
• ▪The United States Treasury Department issued targeted sanctions against one entity based in Hong Kong and one individual linked to Iran's Bank Melli.
• ▪The United States Treasury Department imposed sanctions on Egypt's Banque Misr for doing business with Tehran, proposing to cut off its United Arab Emirates branches from dollar transactions.
• ▪The United States Office of Foreign Assets Control sanctioned nearly 60 entities, individuals, and vessels connected to Iran's regime to curb its access to the global financial system.
• ▪Iran's Foreign Ministry spokesman Esmaeil Baqaei condemned the new United States sanctions as "state terrorism" and an assertion of "extraterritorial sovereignty" over United Nations member states.
• ▪The United States Treasury Department launched a sweeping set of economic sanctions against Iran, which President Donald Trump's administration billed as an "economic D-Day."

Iranian retaliation threats

• ▪Iran's Supreme National Security Council Secretary Mohsen Rezaei warned of "seismic" retaliation against the United States and Middle East neighbors cooperating with the sanctions campaign.
• ▪Mohsen Rezaei suggested that the conflict and United States attacks could prompt Iran to rethink its policy against building a nuclear weapon.
• ▪Iran's Armed Forces Chief of Staff Major General Ali Abdollahi promised that Iran would respond to enemy threats with crushing, punishing, and devastating military actions.
• ▪Iran's Economy Minister Seyed Ali Madanizadeh stated that Tehran is prepared to launch a financial attack against the United States in response to the sanctions.

Strait of Hormuz blockade

• ▪Commercial shipping through the Strait of Hormuz has dropped to a fraction of pre-war levels, with only seven commodity vessels transiting on August 27, 2026.
• ▪Mohsen Rezaei threatened that Iran would block all oil shipments through the Persian Gulf and the Strait of Hormuz if the sanctions campaign proceeded.
• ▪An oil tanker was struck by a projectile off the coast of Oman in the Strait of Hormuz following the United States sanctions announcement.

Iran domestic unrest concerns

• ▪Iran's annual inflation rate reached 66% in July 2026, compounding the severe economic toll of the ongoing war and United States blockade.
• ▪Iranian President Masoud Pezeshkian stated that Iran's foreign trade has shrunk by nearly 35% due to United States sanctions and the naval blockade.
• ▪Iran's Supreme Leader Ayatollah Mojtaba Khamenei banned officials from committing acts that harm "social cohesion" amid fears that economic pain could spark domestic unrest.

Six-month US-Iran war context

• ▪Strikes since late February 2026 reduced Iran's natural gas production capacity by approximately 230 million cubic metres per day.
• ▪The United States and Israel launched airstrikes against Iran on February 28, 2026, initiating a war that has reached its six-month mark.
• ▪Iran discovered a natural gas field in Fars Province containing an estimated 7.5 trillion cubic feet of gas, with 5.7 trillion cubic feet deemed recoverable.

China Iran oil trade

• ▪China purchased more than 80% of Iran's shipped oil in 2025, according to data from the analytics firm Kpler, making it Iran's primary oil buyer.
• ▪China's Foreign Ministry spokesperson Lin Jian stated that China-Iran cooperation is lawful and should not be disrupted or undermined by unilateral United States sanctions.