Iran has warned that it is prepared to withstand a new wave of US sanctions after Washington announced what it described as its biggest financial attack yet against Tehran and threatened countries and businesses that continue dealing with the Iranian regime.
Iran's Economy Minister Ali Madanizadeh said the government had been preparing for the measures and already had a two-year plan to deal with their possible impact. He said the latest US move would not force Iran to give in and predicted it would instead lead to another setback for Washington.
The response came after US Treasury Secretary Scott Bessent announced a sweeping campaign aimed at cutting Iran's financial links with the rest of the world.
Bessent described the move as "the single greatest financial offensive ever" and said the US would cut all economic ties with Iran. He also warned that countries and other entities that continue to provide financial support to Tehran could face isolation.
Madanizadeh said Iran had been expecting such a move for some time and was ready to respond.
"The government is and was ready and has a two-year plan to manage these events," he told state television. "We also have our own tools and know how to play the game."
He also said China and Russia had not accepted the US measures, adding that other countries could also refuse to follow Washington's demands.
China's Foreign Ministry said sanctions and pressure would not solve the problem and that Beijing would take the steps it considered necessary to protect its interests.
The latest US action comes as the conflict continues to affect energy markets around the world. Oil prices have risen during the war, while Iran has warned that it could stop all oil exports from the region if the conflict continues.
Iran has also issued a new warning to ships travelling through the Strait of Hormuz, saying vessels should not pass through the key waterway without permission, according to Reuters.
The Strait of Hormuz, a narrow passage south of Iran, normally carries about one-fifth of the world's oil and gas. However, the flow has effectively been blocked by Iran since the conflict began at the end of February, contributing to higher oil prices in international markets.
At a press conference on Monday, Bessent outlined the US operation, which has been called "Operation Economic Outcast". He said Washington was launching an "economic onslaught against Iran's financial connections around the globe".
"Iran now faces a very clear choice with only two paths before them: complete global isolation....or a path back to normalcy with an opportunity to rejoin the global economy," he said.
The Treasury secretary said the US was moving beyond simply trying to contain Iran and was now seeking to end the threat posed by the country.
Bessent said the US Treasury had identified networks, people and financial channels that Iran uses to get around sanctions and continue selling oil.
The department said it had taken action against five sectors linked to Iran's economy. They include digital assets, technology, gold, aviation and shipping.
The US has also placed sanctions on almost 60 entities, individuals and vessels as part of the wider campaign.
Bessent said the measures were designed to "tighten the noose and block every potential source of revenue" for Iran's Islamic Revolutionary Guard Corps and the wider Iranian regime.
He also warned governments and businesses helping Iran or continuing to trade with the country that they could not "claim they are blind to enabling this activity".
Although he did not name particular countries, Bessent said President Donald Trump would speak to world leaders and make "specific requests to cease their interactions with the regime".
He said governments and businesses would be given time to understand the new sanctions but warned that the US would act quickly.
"They should know that we will move very quickly and that we are serious."
However, questions have already been raised over how much the latest measures can change Iran's financial position.
David Oxley, chief climate and commodities economist at Capital Economics, said the new sanctions could have a limited effect because Iran's oil exports were already being heavily restricted.
"With the renewed US naval blockade already strangling Iran's oil exports, the direct impact of 'economic D-Day' on Iran's energy revenues will be somewhat of a damp squib," he said.
"We suspect that the new package will have only a limited direct impact on Iranian energy flows in the short term."
Oxley said the situation was also linked to Iran's close oil trade with China. He said about 90% of Iran's oil goes to China, which "has not recognised US sanctions in the past and is unlikely to be cowed this time either".
The latest announcement follows several earlier threats and changes in the US position during the conflict.
In April, Trump warned that "a whole civilisation will die tonight" unless Iran agreed to a deal to end the war and reopen the Strait of Hormuz.
The US later moved away from that position after Pakistan stepped in as a mediator and called for further diplomatic efforts.
The conflict has continued to create economic pressure beyond Iran and the Middle East, with higher oil prices raising concerns about the cost of living in the US and other parts of the world.
Petrol and diesel prices are now much higher than they were a year ago. In the US, gasoline prices have risen above $4 a gallon, with the cost of living becoming one of the major concerns among American voters ahead of the mid-term elections in November.
On Monday, Brent crude, the global benchmark for oil prices, was trading at $92 a barrel.
The latest sanctions announcement also comes after Bessent said last week that the US government would step into the bond market and buy back more government debt.
The plan was aimed at increasing demand for US bonds and lowering borrowing costs, but the effect did not last. Long-term borrowing costs rose again a day later.
Iran has already been under tough US economic sanctions for years.
In 2015, former US President Barack Obama and several US allies reached a nuclear agreement with Iran that removed many sanctions in exchange for limits on the country's nuclear programme.
Trump withdrew the US from the agreement in 2018, calling it "defective at its core", and restored the sanctions that had been lifted.
During Joe Biden's presidency, the US made efforts to bring back the earlier agreement, but those attempts did not result in a new deal.
In April this year, the Trump administration imposed another round of sanctions targeting foreign banks and companies doing business with Tehran after its military operations failed to force Iran's regime to surrender.
With Washington now promising a wider financial campaign, Tehran says it has already prepared for the pressure and intends to rely on its own plans and economic tools to deal with the new measures.