US Sanctions on Iran Set to Trigger Global Economic Consequences
The United States is set to unveil its plan for 'toughest sanctions in history' against Iran, which Treasury Secretary Scott Bessent described as 'the single greatest financial offensive ever marshalled against an adversary'. The sanctions are expected to impact Tehran's trading partners, including China, and could have significant consequences for the global economy.
Iran has threatened a 'retaliatory earthquake' if the US goes ahead with its plan, warning Gulf neighbours not to support or join the sanctions. The country's currency hit a record-low on Monday amid the threats, and Iran's semi-official Fars news agency reported that Tehran generated $7.5bn in oil revenues over the first four months of the year.
Dr Neil Quilliam, an energy policy specialist at Chatham House, said that while further sanctions could increase pressure on Iran's economy, they are unlikely to be decisive without targeting Chinese buyers, which account for 80% of Iran's oil exports. The US has agreed to lift sanctions on Iranian oil sales, but these were reimposed after a 60-day ceasefire expired last month.
The effectiveness of the sanctions depends on enforcement, and Dr Quilliam noted that Trump could still sanction smaller refineries in China or impose a land blockade. However, the legislation must pass the US House of Representatives, which could prove challenging given widespread concerns across both parties about the measures.