US launches Operation Economic Outcast against Iran

United States Treasury Secretary Scott Bessent announced Operation Economic Outcast on August 25, 2026, a campaign of secondary sanctions designed to isolate Iran. The measures threaten countries and companies that continue to do business with Tehran with exclusion from the US dollar system.

Bessent declined to name specific countries that would be targeted. He expanded the categories of secondary sanctions already in place to cover aviation, digital assets, gold, shipping and technology. The goal is to cut Iran off from remaining financial and commercial channels after earlier military and economic pressure.

Iran has dismissed the announcement. Tehran has long relied on oil sales, particularly to China, and has developed workarounds involving barter, local currencies and informal networks. Iranian officials described the US move as an attempt to foment internal unrest after military options failed to produce the desired political outcome.

The announcement comes amid ongoing tension over the Strait of Hormuz. Iran and Oman held talks on August 25 about a temporary joint shipping corridor and mine-clearance efforts. The United Kingdom Maritime Trade Operations reported an oil tanker struck by an unknown projectile off the coast of Oman near the strait, with no casualties.

President Donald Trump has framed the campaign as an “economic D-Day.” He has called on other nations to sever financial ties with Iran. China has criticised the new sanctions as illegal. Beijing remains Iran’s largest oil customer and has rejected extraterritorial US measures.

Secondary sanctions carry risk for third countries. Firms that maintain ties with Iran face the choice of exiting those markets or losing access to US finance and markets. Previous rounds have produced mixed results: some companies have complied, while others have continued trade through intermediaries or non-dollar channels.

Iran’s economy has faced repeated shocks from sanctions, currency depreciation and internal mismanagement. The regime has prioritised military and security spending even as civilian shortages have grown. Bessent’s statement offered no timeline for specific designations, leaving markets to assess the practical reach of the new categories.

The campaign sits alongside other US actions in the region, including efforts to reopen navigation in the Strait of Hormuz and ongoing pressure related to Iran’s nuclear and regional activities. Whether the economic measures produce the political leverage Washington seeks remains to be tested by the responses of major trading partners and by Iran’s own adaptive capacity.