The United States on Monday announced new sanctions against Iran and a number of global companies doing business with Iran. Officials have dubbed this period “Economic D-Day” and officially dubbed “Operation Economic Exile” in an effort to force the Iranian government to negotiate an end to the war.
The announcement follows repeated calls by US President Donald Trump for Iranian leaders to take action, including withdrawing their claims to the Strait of Hormuz and returning to talks to end their nuclear program.
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Almost half a year after the war against Iran began, the United States has seen little impact from its military operations against the country. Critical munitions stocks have been depleted and key tools used to project power globally are being turned to Iran.
Analysts say the long-term effects of the war have prompted the Trump administration to try economic sanctions, but Iran is unlikely to be forced to meet its demands.
Negar Mortazavi, a senior fellow at the US-based International Policy Center, told Al Jazeera: “The US is returning to economic pressure because its military has failed to deliver the quick victory it had hoped for.” “The ‘Economic D-Day’ declaration emphasizes that the war so far has failed to force Iran to surrender or achieve Washington’s political objectives.”
What prompted the new sanctions?
“Theoretically, the United States and Iran have significant military disagreements,” Ryan Costello, policy director for the National Iranian American Council (NIAC), told Al Jazeera. “The United States has caused a lot of destruction with munitions, but Iran has also caused a lot of destruction with missiles and drones. So it’s hard to describe the war so far as anything other than a catastrophic failure.”
While the United States killed Iran’s key political and military leaders, the Iranian government leveraged its geography and vast arsenal of drones and missiles to attack key oil and gas infrastructure in a region it relied on to provide stability and attract investors. And the Iranian government’s traffic jams in the Strait of Hormuz are causing suffering for consumers as far away as the United States, who now pay about 40 percent more for gas than before the war.
Trita Parsi, director of the Washington, D.C.-based Quincy Institute, told Al Jazeera: “It was a fundamental miscalculation that President Trump made from the beginning that the threat of war would force the Iranians to surrender.” “Instead, they fought back and fought back very hard.”
The United States is in short supply of anti-missile missiles, according to experts at the Washington, D.C.-based Center for Strategic and International Studies. In late July, the center found that it would take at least three years for the Pentagon to return supplies to pre-war levels. Although the White House denies the existence of such shortages, analysts say the problem is very real, even if temporary, and is forcing the Pentagon to divert resources from adversaries like China.
This includes US aircraft carriers. The Pentagon pulled vital assets away from China and sent the aircraft carrier USS George Washington from Japan to rescue the aircraft carrier USS Abraham Lincoln in the Gulf, whose sailors were at sea months longer than planned due to the war.
Major US military bases in the region, including the Navy’s 5th Fleet headquarters in Bahrain, have been damaged or rendered unsafe for use, adding hundreds of kilometers to supply lines as ships look as far away as Diego Garcia Island in the Indian Ocean for supplies.
“In my judgment, the U.S. military has probably permanently lost access to 15 bases in the Persian Gulf,” retired U.S. Army four-star General Barry R. McCaffrey wrote in X.
“I think it became clear that the United States was running out of runway on this issue, so the administration pivoted to what the United States knows best or has found to be effective in the past, which is these economic tools,” said NIAC Director Jamal Abdi. “In fact, this is the administration’s way of presenting itself as a new, increased pressure policy while scaling back to pre-war levels.”
“Why would I want to blow up the world’s financial system?”
Analysts say Monday’s sanctions announcement was more of a warning than an attack on Iran or other countries doing business with Iran. The U.S. Treasury Department has imposed new sanctions on 60 individuals and entities around the world for doing business with Iran, but major Chinese banks and other banks that help sell Iranian oil were not included.
At least 90% of Iran’s oil exports end up in China, earning Iran tens of billions of dollars in revenue. Ending this trade will require the United States to confront China’s intentions much more directly. Indeed, U.S. Treasury Secretary Scott Bessent acknowledged just that on Monday in response to a reporter’s question about why the U.S. didn’t immediately announce sanctions against Chinese companies long known for facilitating oil trade.
“Why would I want to blow up the world’s financial system?” Mr. Bessent replied.
“For me, this is more of a psychological operation than an actual war,” Sheena Azodi, assistant professor of Middle East politics at George Washington University, told Al Jazeera. “There will be an impact, there is no doubt about it. It will create more chaos, it will increase uncertainty, it will scare people, it will affect the Iranian economy… but I don’t think it will ultimately change Iran’s calculus in the short term.”
Will it be a pain for the Iranian people and a benefit for Washington?
The new US measures aim to expand the scope of already extensive restrictions on Iran’s economy, adding the possibility of secondary sanctions against non-Iranian companies dealing in areas such as digital assets, gold, technology, aviation and shipping.
Tensions with the U.S. government are already forcing Iranians to contend with medical shortages and rising fuel prices. Analysts say many of the new areas being targeted are important to ordinary Iranians looking for ways to circumvent existing sanctions. Gold could help preserve wealth as the Iranian rial depreciates. Digital assets like cryptocurrencies allow relatives to send and receive money across borders. Airlines are forcing Iranians to visit relatives abroad and check on loved ones back home.
Parsi, of the Quincy Institute, said it was questionable whether the new sanctions would affect the Iranian government, but it would affect the Iranian people.
“It will probably be quite impactful and painful for the Iranian people,” he said. “But it’s quite another thing to turn that pain into policy change.”
He noted that the Trump administration has long known how Iran would respond to attempts to coerce it economically. During his first term in 2019, Trump engaged in an online war with Iran, seeking to increase pressure on Tehran with economic measures, and Iranian-backed Houthi forces attacked tankers in the Gulf and oil fields in Saudi Arabia.
Experts say Iran will retaliate if it turns its back on the wall.
“If the purpose of these sanctions is to force Iran to surrender, then experience suggests that Iran would rather escalate than surrender,” Parsi said.
Mortazavi, of the Center for International Policy, said any attempt to impose new sanctions would further expose the limits of U.S. power in the conflict.
“Sanctions will exacerbate the economic pain faced by ordinary Iranians, but years of maximum pressure have shown that economic hardship does not automatically translate into political capitulation,” she said. “If anything, this move reveals the limits of war. The United States can continue to raise costs on Iran, but has not yet forced Iran to change course.”
Meanwhile, the failure to force Iran to give up not only made the war itself unpopular in the United States, but President Trump’s own approval ratings are at an all-time low, with only 31% of Americans supporting the war and 33% approving of the president’s performance, according to a Reuters/Ipsos poll.
With the U.S. midterm elections just months away, Tehran’s leaders are well aware of this, said George Washington University’s Azodi.
“They are calculating that the Trump administration does not want any more conflict ahead of the US midterm elections,” he said. “Iran is likely to try to weather the storm and absorb the pain until the Trump administration comes up with a good offer.”
