US Treasury Secretary Scott Bessent said on Thursday that the United States will impose “the toughest sanctions in history” on Iran, and suggested the measures would reduce the need for further major military operations (Geo News).
Details are promised next week.
Bessent’s comments followed President Donald Trump’s threat a day earlier of “Economic Warfare”, and a warning of economic consequences for any country providing “any type of lifeline” to Iran.
Sanctions instead of strikes
The most consequential part of Bessent’s remarks was the trade-off he drew explicitly.
“If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he told CNBC, using the term for military force.
He also expressed puzzlement at the market’s reaction. Oil rose to more than a three-week high on Thursday following the US threats. “I’m not sure why oil has popped up on this,” Bessent said.
China’s position
Beijing rejected the sanctions, saying pressure will not resolve the crisis.
China’s position carries particular weight here: it buys more than 80 per cent of Iran’s shipped oil, according to Kpler data. Sanctions aimed at cutting off Iran’s revenue run through Chinese purchasers, which is what makes Trump’s warning about countries offering a “lifeline” more than rhetorical.
Where the war stands
The conflict is approaching six months old. Thousands have been killed, Gulf states have been drawn in, and Iran has demonstrated its ability to curb shipping through the Strait of Hormuz — a waterway that carried about a fifth of all traded oil before February.
The United States and Iran have twice announced ceasefire deals, in April and June, each aimed at restoring free shipping through Hormuz as a step towards ending the war. Both collapsed quickly.
Iran has operated under near-continuous heavy sanctions for decades, which is the standing objection to the premise that a further tightening will prove decisive.
Why it matters here
The Hormuz disruption sits underneath Pakistan’s fuel arithmetic. Crude above $91 a barrel and an elevated international crack spread are the conditions that produced this week’s unusual arrangement in which four Karachi refineries agreed to absorb part of their margin to bring diesel down by Rs32.63 a litre.
That arrangement was framed as lasting until the Strait of Hormuz situation improves and international oil markets return to normal.
