As the US government launches its latest plan to paralyze Iran’s economy, the Islamic Republic threatens regional and global responses aimed at raising the stakes for the US and the world.
Treasury Secretary Scott Bessent announced at a press conference on Monday that the United States will target the complex network that Iran has built over the years, allowing the country’s entities to evade broader U.S. sanctions. The move comes six months into the war started by the US and Israel, which subsequently reached a stalemate amid a lack of diplomatic solutions.
The wide-ranging secondary sanctions announced by Bessent include penalties against Iran’s trading partners in areas the Islamic Republic uses to support its economy, including digital assets, technology and shipping. However, President Trump’s long-awaited announcement of “Economic D-Day” measures disappointed many after the United States delayed imposing large-scale new measures and instead focused primarily on expanding and tightening enforcement of existing sanctions, while warning that countries that did not sever ties could face even harsher penalties.
Far from giving in to threats, Iran has flaunted its ability to inflict mutual pain, warning of more attacks on regional oil producers and European countries, and even teasing the weaponization of its nuclear program.
“We have been playing chess for a long time… We have also learned how to play poker,” Iranian Foreign Ministry spokesman Esmail Baghaei told reporters on Monday. “We’ve been playing a combination of the two for a while now.”
Here’s how Iran can respond to US economic expansion.
Iran has blocked ships from using the Strait of Hormuz for months, preventing regional countries from exporting oil and gas through the route, which accounted for one-fifth of the world’s supplies before the war. The Houthis, Iran’s proxies in Yemen, recently opened a new front in the Red Sea, targeting Saudi Arabia’s oil exports and infrastructure.
Now, the Islamic Republic’s military leaders are threatening to attack energy targets across the Strait of Hormuz, and potentially attack some of the emerging oil shipping routes that bypass the waterway.
“If the economic war continues, not a single drop of oil will be exported from anywhere in the Persian Gulf, even through the Strait of Hormuz,” Mohsen Rezaei, head of Iran’s Supreme National Security Council, wrote to X. “We will retaliate in a seismic manner,” he later said in a television interview.
The resulting attacks and transportation disruptions could raise global oil prices and increase gasoline prices at U.S. filling stations.
With the help of the U.S. Navy, Saudi, Kuwaiti, Qatari, and UAE oil companies have begun turning off their tankers’ transponders to avoid detection by Iranian authorities, and while they have had some success exporting oil, export volumes are well below pre-war numbers.
Saudi Arabia has rerouted about 5 million barrels of oil per day through an east-west pipeline that allows exports via the Red Sea rather than Hormuz. Middle Eastern oil producing countries have rerouted an additional 2 million barrels a day to bypass the strait.
Iran has signaled that it is targeting these tankers, publishing a list of 45 vessels that are not complying with the rules it intends to impose on Hormuz shipping, and warning that vessels violating the agreement will face future navigation restrictions, including “fines, detention and confiscation.”
Expansion of the geographical scope of war
Tehran can also target even further away with missiles.
Iran’s Foreign Ministry on Monday noted that a US refueling plane had left Bulgarian territory and warned that Iran could target European Union countries, which are also NATO members.
“Iran has the legitimate right to target the origin and source of any act of aggression,” Baghai told reporters on Monday, adding that “Iran has made clear that any action deemed to support military aggression by the United States and Israel constitutes participation in an act of aggression under international law” against Iran.
During the war, Iran attacked 11 countries, mainly in the Gulf region. However, it is also believed to have attacked bases used by British forces in Cyprus, and appears to have demonstrated its ability to reach islands used by US forces hundreds of miles away, deep in the Indian Ocean.
Attacks against US-allied EU states and NATO members like Bulgaria would represent a significant escalation.
“Iran will consider any country’s participation in or support for the US economic war against the Iranian people as an act of war,” Rezaei said.
Despite Israeli and US claims that have led to multiple attacks on Iranian nuclear facilities, Iran has repeatedly maintained that its nuclear program is peaceful and does not aim to build a bomb.
Following the U.S. and Israeli killing of Supreme Leader Ayatollah Khamenei, who had banned nuclear weapons, the tone among some Iranian officials is gradually shifting toward withdrawing from the Nuclear Non-Proliferation Treaty (NPT), which commits member states to never build bombs.
About half a ton of highly enriched uranium, which can be used to make weapons, remains in Iran’s reserves, and U.S. intelligence agencies assess that Iran is stepping up efforts to sequester the reserves.
According to Iranian lawmakers, Iran’s parliament is considering a bill to withdraw from the NPT. Rezaei issued an unusual statement on Sunday touting the country’s potential to develop nuclear weapons.
“The whole world is saying, ‘Then the NPT has no effect,'” he said in an interview on state television, adding, “When the United States is waging a war like that, people are asking, ‘Why shouldn’t we pursue nuclear weapons ourselves?'”
adaptation and deterrence
Experts say Washington’s collective measures of blockade, sanctions and military action are unlikely to lead to Iran abandoning its core negotiating positions of economic relief and recognition of control of the Strait of Hormuz.
“Iran retains the ability to regionalize the costs it imposes by threatening energy flows, infrastructure, and regional commerce,” Sheena Toosi, a senior fellow at the Center for International Policy in Washington, DC, told CNN. “The more comprehensive the U.S. government seeks to impose an economic blockade, the more countries will need to cooperate, and the more Iranian actors may be able to put pressure on them in response.”
For now, Tusi said Iran’s response will be a combination of economic adaptation and de-escalation.
“We will build alternative lifelines wherever possible, while making clear that attempts at complete economic suppression are not costly to the region.”
