US to broaden secondary sanctions to isolate Iran on 'economic D-Day'

WASHINGTON/ISLAMABAD - The United States was set to warn countries to cut ties with Iran or risk their businesses being cut off from the dollar-based ​financial system when it unveils the "greatest financial offensive ever" on Monday, a ​source told Reuters.

U.S. Treasury Secretary Scott Bessent will outline measures at 1 p.m. (1700 GMT) to broaden the scope of potential secondary sanctions on entities and countries that maintain economic ties with Iran, said the source, who was familiar with the plans but not authorized to speak publicly.

The move is part of U.S. efforts to put pressure on Iran to end the attacks on ships in the Gulf and, more recently via its allies, in the Red Sea, that Tehran launched after the U.S. and Israel began air strikes against it in February. Iran has said it will have ‌the opposite effect.


Also read: Trump will have to risk pain to make new Iran sanctions truly bite

Bessent previously urged ⁠cooperation from ⁠China, the biggest buyer of Iranian oil for several years, although the U.S. blockade of Iran's ports, renewed in mid-July, has already cut Iranian oil flows to China.

But experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between U.S. President Donald Trump and Chinese President Xi Jinping, with any curbs on China's exports of critical minerals especially sensitive.

The Chinese foreign ministry said sanctions and ​pressure tactics do not help and that Beijing would do what was necessary to protect China's interests.

PAKISTAN'S ARMY CHIEF HOLDS TALKS ON IRAN

Bessent may sharpen enforcement against oil shippers, purchasers and currency exchangers who help Iran pay for its imports. He could also target aviation.

Trump has threatened tariffs on goods from countries doing business with Iran, which include Turkey, Iraq and India, although the Supreme ​Court struck down the legal basis for such taxes.

Iran has dismissed the U.S. threat and issued a new warning to ⁠shipping not to ‌pass through the Strait of Hormuz without its permission, listing 45 ships it said had violated its rules and threatening retaliation for any ship-to-ship transfers ​with them.

Bessent wrote in the Financial ​Times that Monday would mark "an economic D-Day - the single greatest financial offensive ever marshalled against an adversary".

Pakistan's army chief Asim Munir, who has built ⁠a personal rapport with Trump, was in Iran on Monday for talks, Iranian media said. Pakistan said the ​visit aimed "to promote regional peace and stability", and a Pakistani source said Munir would meet people close to Iran's supreme leader.

Also read: $20 million: The cost of shipping oil through Strait of Hormuz

Two ​Pakistani sources said Trump had called Munir last week, with another saying the main request was to bring Iran back to negotiations. The White House confirmed the call but did not comment on its substance.

PROJECTILE HITS TANKER NEAR SAUDI RED SEA PORT, MONITORS SAY

The U.S. and Iran have not conducted air strikes on each other's militaries for weeks, but their last official face-to-face talks to end the six-month-old conflict took place in June and strikes on vessels in the Strait of Hormuz have continued.

A projectile struck a tanker west of the Saudi port city of Yanbu in the Red Sea on Monday, causing a fire on the main deck, shipping monitors from the United Kingdom Maritime Trade Operations said.

A spokesperson for Iran's Houthi allies, who last month announced they would block ‌Saudi oil exports diverted to the Red Sea to avoid Hormuz, said they had attacked a vessel in the area. Saudi Arabia's national shipping company confirmed that one of its vessels had been attacked.

Thousands of people have died, most of them in Iran and Lebanon, since the U.S. and Israel began ​strikes on February 28, degrading ​much of Iran's conventional military capacity and inflicting economic ⁠pain while killing Iran's then-Supreme Leader Ayatollah Ali Khamenei.

Yet Iran has continued to attack its Gulf neighbours and keep shipping in the Strait of Hormuz at a near standstill, pushing up world fuel prices. The exact state of its nuclear program, which the Americans and Israelis aim to wipe out, remains unknown.

Oil prices eased on Monday after two weeks of gains as ​investors took profits ahead of the expected U.S. announcement.

Iran has been bracing for the sanctions for days, issuing a series of statements hinting at a major military response.

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said on Sunday further penalties would simply trigger a tighter squeeze on shipping through the Strait of Hormuz.

Iran entered the war with high inflation and energy shortages and must now contend with disrupted trade, lost production and the cost of rebuilding damaged infrastructure. A slide in the rial currency, which prompted protests in January that were violently suppressed, reached a new record low on Monday, 25% below its January level.