Donald Trump has announced a new campaign to isolate Iran’s economy, threatening “tremendous economic consequences” on any country that helps or does business with Tehran, a move that could set up a fresh confrontation with China if implemented. “Today, I am announcing the most crushing economic operation ever taken against any country!” Trump wrote on Truth Social. “Any country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face tremendous economic consequences.” His announcement however contained no detail on what actions would be taken or which countries could be affected, and comes as the war nears its six-month mark, with the president facing pressure over the cost of the conflict as the US midterm elections approach. Last month the US president paused attacks on Iran, after a fortnight of nightly strikes that had failed to bring officials in Tehran back to the negotiating table and reports that the war has run down US stockpiles of key munitions. Pentagon advisers reportedly told Trump last month that the US had nearly exhausted its list of targets in Iran and the military campaign had reached the limits of its effectiveness. The White House has signalled in recent weeks a shift in strategy to tightening pressure on Iran economically. US treasury secretary Scott Bessent said last week the US would begin ramping up efforts to isolating Iran economically. The US treasury has for months been carrying out an effort, called Operation Economic Fury, aiming to cut off Iran’s funding with targeted sanctions, while a naval blockade in the straight of Hormuz has sought to block Iranian ports from exporting oil vital to keeping the country’s economy afloat. Iran’s economy already faces a punishing array of US and western sanctions that have ground down the economy over years and curtailed its ability to sell oil. But experts say the country’s leaders have learned to adapt to the measures, including by exporting oil through a sophisticated network of shadow tankers. In his announcement on Wednesday, Trump listed several activities that he said needed to stop immediately, including “oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies”. The wording of the president’s announcement suggested that he could be threatening secondary sanctions on country’s that buy Iranian oil, but experts say such a move could lead to direct confrontation with China – Iran’s biggest trading partner – at a time when the US is trying to establish a new trading relationship with Beijing. “Whatever new economic measures the US can use will need to be directed at Iran’s trading partners,” said Gregory Brew, a senior analyst at theEurasia Group, adding that it will be “hard for the US to direct such actions at China, the country that matters most to Iran’s economic future.” Chinese leader Xi Jinping is also expected to visit the US next month, further complicating any efforts to target Beijing’s imports of Iranian oil. Mohammad Mokhber, an adviser to Iran’s supreme leader, said on Tuesday that military pressure and sanctions would not break Iran’s resolve. He added that Iran remained open to dialogue with the US, but would not confuse negotiations with surrender, according to the semi-official Fars news agency. On Tuesday, the United Arab Emirates, announced it would suspend all trade activities, commercial exchanges and financial transactions with Iran, after it said it had detected two missiles launched from the country. Tehran dismissed the reports as baseless. Prior to the war, the UAE was one of Iran’s biggest trade partners, providing more than 30% of its imports. Earlier on Wednesday, Trump also claimed that vessels from Gulf countries allied with the US were continuing to move through the strait of Hormuz, despite the Iranian threat to shipping in the waterway. The president said the US military was aiding ships in the strait, saying “right now, a lot of boats are coming through.” Axios reported that US forces were facilitating the transit of 15 to 20 ships in and out of the Hormuz each night in recent weeks – carrying “roughly half the prewar volume” of daily oil shipments – while also continuing to blockade Iranian exports. Those volumes were disputed by some, with ship tracking data from Kpler showing transits remained low. Referring to the Axios report, Danny Citrinowicz, the former head of the Iran branch of Israeli military intelligence, said it was an important operational development, but questioned how long the US government would be able to sustain such an operation. “More importantly, this will not force Iran to surrender or fundamentally change its negotiating position,” said Citrinowicz.
Donald Trump has announced a new campaign to isolate Iran’s economy, threatening “tremendous economic consequences” on any country that helps or does business with Tehran, a move that could set up a fresh confrontation with China if implemented. “Today, I am announcing the most c…
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Following six months of conflict, Iranian officials have indicated a strategic shift from retaliation to proactive offensive operations, citing the control of the Strait of Hormuz as leverage in stalled US negotiations. While Supreme Leader Mojtaba Khamenei and Revolutionary Guards officials have called for increased deterrence and offensive priorities, analysts note this adjustment may not signal a move toward a preventive war doctrine.
Tehran: Six months into its war with the United States, Iran's military has begun signalling a shift from retaliation to offence, which analysts say could reflect Tehran's belief it holds leverage to advance its demands and break the stalemate. Since US-Israeli strikes launched the war on February 28, Tehran has largely portrayed its strikes against the United States, Israel and Gulf countries as revenge for attacks on the Islamic republic.
Also read: Trump declares 'Economic D-Day' against Iran, warns nations aiding Tehran of 'tremendous' consequences Now, Iranian officials are openly talking about giving offensive operations a greater priority while keeping control over the strategic Strait of Hormuz, a key source of leverage against Washington that has disrupted a vital global energy route and driven up energy prices.
Iran's supreme leader Mojtaba Khamenei outlined that approach in a reshuffle of top military commanders earlier this month, calling for "strengthening maximum deterrence and preparing to conduct large-scale offensive operations against the enemy". Last week, a deputy commander of Iran's Revolutionary Guards indicated that Tehran was revising its military doctrine to give "offensive operations" strategic priority.
Analyst Sina Toossi of the Center for International Policy believes the shift to offensive operations does not mean Tehran was "adopting a doctrine of preventive war". Rather, he said, Tehran appears to have concluded that "if confrontation becomes unavoidable, Iran should escalate earlier and more forcefully rather than wait for the United States or Israel to define the terms of the conflict".
Ahmad Zeidabadi, a Tehran-based international relations expert, believes the shift reflects Tehran's assessment of Washington's intentions. "The Islamic Republic believes the United States has likely ruled out war and now seeks to perpetuate the status quo including the US naval blockade and the economic pressure," he told AFP.
- Iran's calculus - Diplomatic efforts with the US remain stalled, especially since a June 17 truce collapsed and the US reimposed oil sanctions and the blockade on Iranian ports. "Iranians believe that diplomacy is doomed to fail in the current climate and that the Americans will not accept their terms," said Zeidabadi.
"Consequently, they may feel compelled to resort to offensive action to force the US to accept Iranian conditions ... and to initiate a new round of negotiations." Iran suffered heavy losses in the initial bombardment campaign, including the killing of supreme leader Ayatollah Ali Khamenei and senior military commanders, as well as extensive material and economic damage.
But the political system has remained intact, and intense bombardment eventually subsided following an April 8 ceasefire, apart from sporadic exchanges of fire, particularly in and around Hormuz. The war has since spread across the region to include clashes between Saudi Arabia and the Iran-backed Houthis in Yemen and the disruption of shipping in the Red Sea's Bab al-Mandab strait.
Also read: US warns Siemens devices can be hacked amid fears Iran is breaching water plants "Tehran increasingly believes that American military superiority does not give Washington escalation dominance," said Toossi. The Strait of Hormuz has become central to that calculus, with Tehran requiring vessels to seek permission and to pay service fees to transit -- a move strongly opposed by Washington and regional countries.
Reopening the strait has become a US priority. US Vice President JD Vance said last week that "goal number one" was keeping energy prices low for Americans, while preventing Tehran from acquiring a nuclear weapon ranked second. A June 17 memorandum of understanding between Tehran and Washington that outlined terms for a truce was a far cry from US President Donald Trump's initial call for Iran's "unconditional surrender".
That truce later collapsed over disagreements primarily over the management of the Hormuz but Iranian officials still tout it as evidence of "victory". "I can state with conviction that we have won this war in the true sense of the word, both militarily and politically," top negotiator Mohammad Bagher Ghalibaf said in a speech last week, while describing the deal as a source of "pride and victory".
- Risk of miscalculation - An Iranian attack in late July on a US air base and a command centre in Jordan has been portrayed on Iranian media as an example of that "preemptive" approach. For Hossein Kanani-Moghadam, an international relations expert and former general in the Revolutionary Guards, the new strategy could take other forms.
"Such operations could encompass a combination of cyber warfare, psychological warfare, intelligence operations, and economic warfare," he said. But Tehran's calculus comes with serious risks. "If this threat is serious ... the outcome of this scenario would be catastrophic for Iran and the region," said Zeidabadi.
Toossi also believes that the strategy "means future crises could escalate much faster". The broader danger, according to Toossi, is what he described as "reciprocal deterrence trap" with each side responding to the other's attempts to strengthen deterrence as evidence it must escalate further.
"That is a much more unstable strategic environment, even if neither side actually wants another major war," he said. (You can now subscribe to our Economic Times WhatsApp channel) Since US-Israeli strikes launched the war on February 28, Tehran has largely portrayed its strikes against the United States, Israel and Gulf countries as revenge for attacks on the Islamic republic.
Also read: Trump declares 'Economic D-Day' against Iran, warns nations aiding Tehran of 'tremendous' consequences Now, Iranian officials are openly talking about giving offensive operations a greater priority while keeping control over the strategic Strait of Hormuz, a key source of leverage against Washington that has disrupted a vital global energy route and driven up energy prices.
Iran's supreme leader Mojtaba Khamenei outlined that approach in a reshuffle of top military commanders earlier this month, calling for "strengthening maximum deterrence and preparing to conduct large-scale offensive operations against the enemy". Last week, a deputy commander of Iran's Revolutionary Guards indicated that Tehran was revising its military doctrine to give "offensive operations" strategic priority.
Analyst Sina Toossi of the Center for International Policy believes the shift to offensive operations does not mean Tehran was "adopting a doctrine of preventive war". Rather, he said, Tehran appears to have concluded that "if confrontation becomes unavoidable, Iran should escalate earlier and more forcefully rather than wait for the United States or Israel to define the terms of the conflict".
Ahmad Zeidabadi, a Tehran-based international relations expert, believes the shift reflects Tehran's assessment of Washington's intentions. "The Islamic Republic believes the United States has likely ruled out war and now seeks to perpetuate the status quo including the US naval blockade and the economic pressure," he told AFP.
- Iran's calculus - Diplomatic efforts with the US remain stalled, especially since a June 17 truce collapsed and the US reimposed oil sanctions and the blockade on Iranian ports. "Iranians believe that diplomacy is doomed to fail in the current climate and that the Americans will not accept their terms," said Zeidabadi.
"Consequently, they may feel compelled to resort to offensive action to force the US to accept Iranian conditions ... and to initiate a new round of negotiations." Iran suffered heavy losses in the initial bombardment campaign, including the killing of supreme leader Ayatollah Ali Khamenei and senior military commanders, as well as extensive material and economic damage.
But the political system has remained intact, and intense bombardment eventually subsided following an April 8 ceasefire, apart from sporadic exchanges of fire, particularly in and around Hormuz. The war has since spread across the region to include clashes between Saudi Arabia and the Iran-backed Houthis in Yemen and the disruption of shipping in the Red Sea's Bab al-Mandab strait.
Also read: US warns Siemens devices can be hacked amid fears Iran is breaching water plants "Tehran increasingly believes that American military superiority does not give Washington escalation dominance," said Toossi. The Strait of Hormuz has become central to that calculus, with Tehran requiring vessels to seek permission and to pay service fees to transit -- a move strongly opposed by Washington and regional countries.
Reopening the strait has become a US priority. US Vice President JD Vance said last week that "goal number one" was keeping energy prices low for Americans, while preventing Tehran from acquiring a nuclear weapon ranked second. A June 17 memorandum of understanding between Tehran and Washington that outlined terms for a truce was a far cry from US President Donald Trump's initial call for Iran's "unconditional surrender".
That truce later collapsed over disagreements primarily over the management of the Hormuz but Iranian officials still tout it as evidence of "victory". "I can state with conviction that we have won this war in the true sense of the word, both militarily and politically," top negotiator Mohammad Bagher Ghalibaf said in a speech last week, while describing the deal as a source of "pride and victory".
- Risk of miscalculation - An Iranian attack in late July on a US air base and a command centre in Jordan has been portrayed on Iranian media as an example of that "preemptive" approach. For Hossein Kanani-Moghadam, an international relations expert and former general in the Revolutionary Guards, the new strategy could take other forms.
"Such operations could encompass a combination of cyber warfare, psychological warfare, intelligence operations, and economic warfare," he said. But Tehran's calculus comes with serious risks. "If this threat is serious ... the outcome of this scenario would be catastrophic for Iran and the region," said Zeidabadi.
Toossi also believes that the strategy "means future crises could escalate much faster". The broader danger, according to Toossi, is what he described as "reciprocal deterrence trap" with each side responding to the other's attempts to strengthen deterrence as evidence it must escalate further.
"That is a much more unstable strategic environment, even if neither side actually wants another major war," he said.
Iranian leaders threaten to bomb British base on Cyprus if the U.S. steps up the war - See more Daily Mail on Google - save us as a Preferred Source Iranian leaders are preparing to resume attacks on a British base in Cyprus should Donald Trump escalate the conflict.
RAF Akrotiri, a centre for UK air operations in the region, was struck by an Iranian drone in March – damaging a hangar and causing a political row. Then-prime minister Keir Starmer faced questions from the Cypriot government over its failure to protect the base situated near the tourist hub of Limassol.
It emerged on Wednesday Iran is considering attacking the base and US military sites in Europe. Cypriot officials responded by appealing to Iran not to strike the Mediterranean island. A Cypriot government source said: 'We are in contact with Iran, and Cyprus is not a target.
' The Ministry of Defence insisted the security of the base, its personnel and their dependants were 'our highest priority'. A spokesman insisted RAF Akrotiri was protected by 'robust, multi-layered security measures'. Soldiers prepared to board an aircraft in April 2023 at RAF Akrotiri which was bound for Sudan An Iranian drone hit the RAF Akrotiri base in Cyprus, pictured, in March At the beginning of the conflict families of personnel at Akrotiri were forced to abandon their homes due to the Iranian aerial threat.
Labour was lambasted at the time for leaving UK service personnel and partners and children so vulnerable, and for failing to deploy a Royal Navy warship to defend Cyprus. According to a report in the Financial Times, Iranian forces are also considering US military targets in eastern and southern Europe.
It follows the US President threatening to resume attacks on Iran's civilian infrastructure. Iranian insiders told the Financial Times the country would place 'no limits' on its response should the US attack its natural resources, energy plans and transport networks.
They said Iran would defend itself 'at any price' including 'going beyond the region and hitting Europe, too'. Experts say Iran's tactic is to attack countries, such as Cyprus, that host bases but are opposed to the conflict in the hope it will call for an end to war, as Jordan did when its US bases came under fire.
Iran could also target under-sea cables in the region as hardliners in its government push for a tougher stance against the US and its allies. Diplomatic efforts to reopen the Strait of Hormuz and resume negotiations over a broader agreement to end the war have so far failed to produce a breakthrough.
The US is exerting financial pressure on Iran by blockading its ports. Last night, the United Arab Emirates said it was suspending trade with Iran.
MS Now reported that War Secretary Pete Hegseth allegedly concealed the destruction of Naval Support Activity Bahrain, a key CENTCOM logistics hub, by Iranian ballistic missiles during Operation Epic Fury. While the administration has dismissed recent reports of resupply shortfalls and morale issues aboard the USS Lincoln as overblown, the outlet attributes the crisis to this alleged non-disclosure of the infrastructure damage.