WASHINGTON, Aug 21, 2026 (Alliance News): US Treasury Secretary Scott Bessent said the United States will impose “the toughest sanctions in history” on Iran, saying the move could reduce the need for further major military operations as Washington seeks to pressure Tehran to end the ongoing conflict.
Bessent’s comments on Thursday came a day after President Donald Trump threatened what he described as “Economic Warfare” against Iran and warned that countries providing “any type of lifeline to Iran” could face serious economic consequences.
The Treasury secretary said the details of the new sanctions package would be announced next week, as the United States increases economic pressure on Tehran amid an almost six-month-old war that has disrupted regional energy supplies and shipping.
Oil prices rose to more than a three-week high on Thursday following the latest US threats of financial penalties. Markets have remained highly sensitive to developments in the conflict because of the potential impact on crude oil supplies and shipping through the Strait of Hormuz.
“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.
The comments suggested that Washington could seek to rely more heavily on economic measures rather than immediately launching another major military operation.
US threatens wider economic pressure
President Trump had earlier warned that the United States would impose unprecedented economic pressure on Iran and countries that continue to support its economy.
Trump described the planned measures as “Economic Warfare and Isolation on an unprecedented scale”.
He warned that countries allowing their financial institutions, businesses, airports or government entities to provide assistance to Iran could face what he called “TREMENDOUS Economic Consequences”.
The warning has raised concerns among countries that maintain commercial or diplomatic relations with Tehran, particularly those involved in Iran’s energy exports.
Bessent said Washington was preparing a comprehensive sanctions package and would provide more details during a press conference on Monday.
“It is a one-two punch. We have the blockade (on Iran), and we are going to have the toughest sanctions in history,” Bessent said.
He was referring to a US naval blockade imposed on Iran in April, which was later paused for a month in mid-June.
“It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” Bessent said.
Iran rejects US sanctions
Iran has strongly rejected the latest US threats, describing Washington’s economic and trade restrictions as “economic terrorism”.
Iranian authorities have argued that sanctions will not force the country to abandon what they describe as its independence, dignity and national sovereignty.
Iran has lived under extensive US sanctions for decades, with the pressure intensifying following the Islamic Revolution of 1979 and expanding through successive disputes over Iran’s nuclear programme, regional activities and foreign policy.
Iran’s foreign ministry said the latest measures would not weaken the country’s determination to defend its interests.
The escalation comes as the conflict continues to place pressure on the regional economy and global energy markets.
Strait of Hormuz remains critical
A major concern for international markets is the Strait of Hormuz, a narrow but strategically important waterway connecting the Persian Gulf with the Gulf of Oman.
Before the conflict began, the route carried roughly one-fifth of the world’s traded oil, making any disruption there a major concern for oil-importing countries.
Iran has demonstrated its ability to restrict shipping through the waterway, increasing concerns about energy supplies and transportation costs.
Thousands of people have been killed during the conflict, which has also drawn Gulf countries into the wider confrontation and created uncertainty across global financial and energy markets.
The United States and Iran have twice announced ceasefire agreements, in April and June, with the stated aim of restoring the free movement of shipping through the Strait of Hormuz and creating a path toward ending the conflict.
However, both ceasefires quickly collapsed.
Washington pressures China
The latest US strategy also places China in a difficult position because Beijing remains a major buyer of Iranian oil.
According to 2025 data from analytics firm Kpler, China purchases more than 80% of Iran’s shipped oil.
Washington has increasingly focused on countries that continue economic relations with Tehran, raising the possibility of secondary sanctions against businesses and financial institutions involved in Iranian trade.
Bessent was asked whether the United States could target China because of its business dealings with Iran.
He said some discussions were better handled privately but urged Beijing to cooperate with Washington.
“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.
However, imposing additional economic pressure on China could create another major confrontation for Washington.
China is one of the world’s largest economies and a major exporter to the United States, including critical rare-earth minerals that are important for a range of advanced industries.
China calls for diplomacy
China has rejected the US approach of using sanctions and economic pressure to resolve the conflict.
A spokesperson for the Chinese embassy in Washington said that sanctions and pressure would not help solve the crisis.
“China calls on the relevant parties to take responsible actions and resolve the issue through political and diplomatic means,” the spokesperson said.
Beijing’s position indicates that China is likely to oppose efforts to expand economic restrictions against Iran and could face increasing pressure from Washington over its continued purchase of Iranian oil.
The dispute therefore risks becoming broader than the US-Iran conflict, potentially creating another point of tension between Washington and Beijing.
Economic pressure versus military action
Bessent’s comments also highlight a central question facing the Trump administration: whether intensified economic sanctions can achieve Washington’s objectives without another large-scale military escalation.
The US Treasury chief suggested that maximum economic pressure could reduce the likelihood of a renewed major military operation.
However, the impact of sanctions could depend heavily on whether countries outside the US continue trading with Iran.
If major buyers of Iranian oil and other commodities continue their business, Tehran could retain important sources of revenue despite American restrictions.
For Washington, enforcing sanctions against third countries could therefore become a major diplomatic and economic challenge.
The United States is expected to provide further details of the sanctions package next week, potentially clarifying which sectors, companies and countries could be targeted.
