President Donald Trump announced a sweeping new economic offensive against Iran, calling it the “most crushing economic operation ever taken against any country” as he shifted from military pressure toward an expansive financial campaign against Tehran and countries accused of supporting it.
Trump warned that countries providing “any type of lifeline” to Iran would also face “tremendous economic consequences.”
In his post, he wrote, “Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — It all needs to stop NOW. You know who you are.”
He added, “This will be an ECONOMIC D-DAY, and we need all of our Allies to stand with the United States of America to isolate and defeat, the Iran threat.”
Trump said Iran had been given an unprecedented opportunity to reach a deal with the United States but had failed to take it. He claimed Iran’s navy had been destroyed, its air force disabled, its military factories reduced to rubble and its currency devalued. He also reiterated that Iran would never be permitted to obtain a nuclear weapon.
A 60-day deadline expires
Trump’s announcement came two days after a 60-day negotiating window between Washington and Tehran, agreed to in June, expired on August 17, without a breakthrough. The negotiating period had been intended to produce a peace deal with Iran.
Iranian Foreign Ministry spokesman Esmaeil Baghaei told reporters that the 60-day period had “completely lost its relevance.” The following day, Iran’s top negotiator, Mohammad Bagher Ghalibaf, said in Tehran that the Strait of Hormuz would not reopen until the United States lifted its naval blockade on Iranian ports.
Iran has closed the Strait of Hormuz, a waterway that carries roughly a quarter of the world’s seaborne oil and liquefied natural gas trade. The U.S. Navy declared its own blockade of Iranian ports in April, directing vessels through routes Tehran considers illegal. A ceasefire framework signed in June at the Palace of Versailles later collapsed amid mutual accusations of violations.
Trump’s claims on the strait
Speaking to reporters at the White House, Trump insisted the Strait of Hormuz remained passable despite the standoff.
“Right now the Strait is open. A lot of boats are coming through,” he said, describing the U.S. naval blockade as “extremely effective.” Trump said no vessels had gotten into Iran, though he acknowledged traffic could slow at certain points.
Trump also suggested the strait may be losing some of its strategic importance, pointing to alternative routes and increased U.S. production in Texas, Alaska and Louisiana as ways to reduce global dependence on the waterway. He left open the possibility of additional sanctions, saying, “Well, we have things that we could sanction. We have very draconian sanctions, and we’ll see what happens.”
Iran’s government disputed Trump’s characterization. Deputy Foreign Minister Kazem Gharibabadi called Trump “deluded” for claiming the Strait of Hormuz was open. Tehran has continued to insist the waterway will remain shut until the United States lifts its blockade, making the strait a central flashpoint in the nearly six-month conflict.
Bessent’s earlier warning
Trump’s announcement followed remarks by Treasury Secretary Scott Bessent on August 13, during an interview with Newsmax’s Rob Schmitt Tonight, in which he previewed the pressure campaign.
Bessent said the effort would involve “a combination of economic isolation like the world has never seen before and the continued blockade in the Strait of Hormuz that will keep anything from going in or out of the Iranian ports.”
The naval blockade had already cost Iran nearly $5 billion in oil revenue by early May. The head of the Iran-China Chamber of Commerce estimated the blockade could cost Iran as much as $18 billion annually if it continues.
UAE cuts ties, oil prices climb
Trump’s declaration came a day after the United Arab Emirates announced it would suspend all financial and economic transactions with Iran following missile fire that Tehran directed at the Gulf nation.
The decision helped push oil prices higher as shipping traffic through the Strait of Hormuz remained subdued. Brent crude futures settled 60 cents or 0.7%, higher at $91.62 a barrel Wednesday, while U.S. West Texas Intermediate crude rose 89 cents or 1.1%, to $85.83 a barrel. Both marked their highest closing levels since July 24.
Dennis Kissler, senior vice president of trading at BOK Financial, told Reuters that crude futures remained supported by regional geopolitical tensions, particularly the UAE’s decision to cut financial ties with Iran following the missile attacks.
Ship traffic through the strait also remained well below prewar levels. Data from ship-tracking firm Kpler showed that only six vessels crossed the Strait of Hormuz on August 18, compared with a 10-day daily average of 11 crossings.
Trump’s threats toward Oman
Trump’s announced a separate escalation with Oman, a longtime U.S. ally that has served as an intermediary in shipping negotiations with Tehran.
In a Fox News interview with correspondent Trey Yingst, Trump warned, “If Oman gets in the way, we’ll bomb the s*** out of them,” when asked about talks between Muscat and Tehran over managing traffic through the strait.
Asked about the comments later that day in the Oval Office, Trump said he did not think Oman had “behaved very well,” but added that the U.S. would “handle them very easily, just like we do other things.”
It was the second time Trump had threatened Oman over the issue, following a similar threat in May. The remarks drew criticism from former U.S. Ambassador to Oman Marc J. Sievers, who said he was puzzled by the threats and suggested Trump may not have meant them literally but instead intended to get Muscat’s attention.