US Threatens Economic Penalties Against Iran Amid Escalating Tensions

DUBAI/WASHINGTON: Iran said on Friday that its response to any new U. S. threats would be “devastating” after Washington pledged ​to impose the toughest financial penalties in history with the aim of toppling the Iranian leadership. U. S. Treasury chief Scott Bessent said he would give details on Monday of the ‌planned sanctions, which follow a warning from President Donald Trump of economic consequences against any country that provided “any type of lifeline to Iran.” The chief of staff of Iran’s Armed Forces, Major General Ali Abdollahi, said the Islamic Republic’s reaction would be broad and decisive. “With preparedness across land, sea, air, air defence and cyberspace, Iran’s armed forces will respond to the enemy’s new threats with crushing, punishing and devastating responses,” Abdollahi was quoted as saying by Iranian media. Iran’s parliament speaker, ​Mohammad Baqer Qalibaf, the country’s main negotiator in mediated talks with the United States, said Washington appeared to have concluded it could not prevail in its direct military confrontation. “We must ​make plans to deal with the unjust sanctions so that we can overcome them,” he said in neighbouring Iraq, accusing the U. S. and Israel ⁠of resorting to what he said was economic and “cognitive” warfare. Oil prices steadied on Friday but were on track for a second weekly rise on concern ​over Gulf energy exports. Oil hit a more than three-week high on Thursday after the sanctions threat, intended to force Iran to agree an end to a conflict that has stranded millions of barrels of ​Middle Eastern oil. “I’m not sure why oil has popped up on this,” Bessent told CNBC. “If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he said, using a term referring to military force. Just seven commodity ships sailed along the Strait of Hormuz on Thursday, half the previous day’s tally, data from shiptracker Kpler showed, compared with more than 130 a day before the war. Thousands of people have ​been killed in the war, which has drawn in Gulf nations and raised global fuel prices as Iran has attacked shipping through the Strait of Hormuz, which before February carried about a fifth ​of all traded oil. The U. S. and Iran have twice announced ceasefire deals, in April and June, aiming to restore the free flow of ships through Hormuz on a path towards ending the nearly six-month-old conflict, but both ‌quickly crumbled. Before Bessent ⁠spoke, Iran’s foreign ministry said U. S. sanctions would not “create even the slightest hesitation in Iranians’ determination to safeguard Iran’s independence, dignity and national sovereignty.” Bessent told CNBC he would “talk about exactly what we’re going to do” on Iran at a press conference on Monday. “We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” he said, describing a naval blockade reimposed on Iran in July and the “toughest sanctions in history” as a “one-two punch”. Iran has weathered near-continuous, punishing economic sanctions for nearly 50 years, since the Islamic Revolution of 1979, but its ​people are suffering high inflation, a weakening currency ​and energy shortages along with damaged infrastructure. Some ⁠Iranians interviewed by Reuters have said more economic punishment could increase hardship, weaken the clerical establishment and prompt unrest, although there has been no sign of that since a deadly crackdown on protests in January. Trump is under pressure to end the war, with high fuel prices dragging down his approval ratings and ​potentially threatening his Republican Party’s control of Congress in midterm elections in November. Offers of Iranian crude ​to Chinese buyers have already declined ⁠since the U. S. reimposed its blockade on Iranian ports in mid-July, trade sources told Reuters. China buys more than 80% of Iran’s shipped oil, according to 2025 data from analytics firm Kpler, but further U. S. economic warfare with Beijing, which has eased earlier restrictions on exports of its vital rare-earth minerals, risks retaliation. When asked if the U. S. could target China for doing business with Iran, Bessent said many conversations were best held in private. “Keep ⁠in mind that ​the Chinese get 50% (of their) energy… from the Gulf. So it would do them a big service to get ​with the program,” he said. China’s embassy in Washington said “sanctions and pressure do not help resolve the problem”, calling for diplomatic means. Tightening sanctions entails other risks, especially to U. S. allies in the Gulf, whose energy facilities and desalination plants they depend on for drinking ​water have come under Iranian attack.