The United States has intensified economic pressure on Iran, warning foreign financial institutions that they could face sanctions for continuing to conduct business with sanctioned Iranian banks and announcing new measures targeting key sectors of the Iranian economy.
The U.S. Treasury Department said on Monday that foreign financial institutions continuing to transact with sanctioned Iranian financial institutions could be targeted at any time without advance notice. It urged them to take immediate steps to terminate such activities and relationships.
The warning came after Washington expanded sanctions on Oct. 1 against Iran’s automotive and rail sectors and foreign suppliers, as part of what Treasury calls “Operation Economic Outcast”, aimed at cutting Tehran’s access to funds used for warfare, missile development, cyberattacks and the Islamic Revolutionary Guard Corps.
The measures targeted major Iranian companies including Iran Khodro Company, SAIPA, the Islamic Republic of Iran Railway Company, Raja Passenger Trains Company and the Railway Transportation Company, as well as foreign companies in Indonesia, the UAE and Turkey supplying Iran’s automotive sector.
Treasury has also targeted Iran-linked sanctions-evasion networks. On Oct. 1, it sanctioned the Russia-linked A7 shadow banking network, which it said was used by Iran to evade sanctions and move illicit funds.
The latest measures add to sanctions imposed in recent weeks. On Sept. 29, Treasury sanctioned 10 individuals and entities in several jurisdictions that it accused of procuring weapons and components for Iran’s Ministry of Defense and Armed Forces Logistics.
Iran rejects US economic pressure
Iran has rejected Washington’s sanctions campaign and continued to demand sanctions relief as part of efforts to resolve the wider conflict.
Iran’s Foreign Ministry condemned U.S. efforts to disrupt Iranian trade and air transport through what it described as the extraterritorial enforcement of U.S. sanctions, calling the measures illegal and inhumane. Tehran urged Iraq to remove restrictions on flights between the two countries that it linked to the sanctions.
Iran has also made sanctions relief a central condition in proposals aimed at ending the conflict and reopening the Strait of Hormuz. Reuters reported that Tehran has insisted on sanctions relief and other conditions before proceeding with nuclear negotiations.
Iranian officials have warned that pressure from Washington will not force Tehran into concessions. Foreign Minister Abbas Araghchi has said Iran is prepared to respond militarily if the United States chooses aggression over diplomacy, while Tehran has continued to press for a negotiated settlement.
The sanctions are being imposed as Iran faces severe economic pressure. The Iranian rial fell to a new low earlier this month, prompting the central bank to sell dollars through state banks as authorities sought to support the currency. Reuters reported the rial had lost more than half its value over the past year, with inflation above 70%.
Trump links pressure to energy and security
President Donald Trump has continued to defend the economic costs associated with the conflict, saying higher gasoline prices paid by American consumers were a small price for keeping the United States and the world safe.
Speaking at an election rally in Grand Island, Nebraska, Trump again said the United States would not allow Iran to acquire a nuclear weapon.
Trump also said gasoline prices would fall below $1.85 a gallon in a short period, potentially before or shortly after the Nov. 3 midterm elections.
He has repeatedly argued that U.S. military and economic pressure is necessary to prevent Iran from developing a nuclear weapon, even as Tehran and Washington remain at odds over the terms for ending the conflict.
The latest sanctions and financial warning come as diplomatic efforts continue. Iran has proposed conditions that include sanctions relief and the reopening of the Strait of Hormuz, while Trump has rejected key elements of Tehran’s proposals.
