Treasury Secretary Scott Bessent announced a new set of sanctions against Iran on August 24, 2026, targeting Iranian financial institutions and warning of further actions against global partners facilitating Iran’s economy. Bessent vowed an "economic onslaught" against Iran and its trading partners.

The US announced plans to sanction the UAE-based branches of Egypt’s Banque Misr, expanding the scope of financial restrictions beyond Iranian entities. Bessent warned that the world would see "a major announcement of a financial institution being sanctioned by the end of this week." He acknowledged that going too fast and too hard risked tanking the global financial system, noting that the US was engaged in "quiet diplomacy" to get its way.

Bessent compared the US response to the historic 1944 D-Day landings in Normandy, France. The sanctions come as Iran has faced a full US Navy blockade of its ports. US officials asked counterparts in the UK for a statement of support, seeking to build a coalition around the new measures.

Despite the announced restrictions, commercial flights continued between Iran and Turkey. Commercial flights also continued between Iran and the United Arab Emirates, even though the United Arab Emirates had promised to sever all trade and financial transactions with Tehran. Iranian bank branches remained open in Dubai, and a Bank Melli branch in Abu Dhabi remained open for business.

Flight routes between Iran and Azerbaijan remained unaffected, as did flight routes between Iran and multiple destinations in Russia. Flight routes between Iran and multiple destinations in China remained unaffected, maintaining air connectivity despite the economic pressure.

Turkey has not received any formal guidance from the US on the restrictions and how they apply to Iran. Pakistan’s overland trade with Iran, such as in rice and mangoes, had not slowed down. Pakistan’s Foreign Ministry spokesman Tahir Andrabi told reporters that the country "is not obliged" to respond to unilateral sanctions.

China issued a warning to Washington regarding the sanctions. China buys 90% of Iran’s oil, making it a critical factor in the effectiveness of any economic isolation strategy. "You can’t unleash meaningful economic warfare on Iran while ignoring the one country that absorbs 90% of its oil exports," said Leland Miller, the CEO of China Beige Book data platform.

"As the war passes the six-month mark, the public actions taken by the Treasury Department this week do not match the hype," said Alex Zerden, a former US Treasury official and founder of Capitol Peak Strategies. "Operation Economic Outcast is a continuation of 47 years of restrictive economic measures against Iran but does not provide a clearer theory of economic or military victory in this current campaign," Zerden said.

"The idea Iran can be knocked out with this is risible — it’s not going to move the needle," said Stephen Fallon, principal adviser at DBM Consulting. "It’s not possible to get a completely airtight seal on this thing. There are too many actors, and it’s too rewarding for the people involved," Fallon said.

President Donald Trump responded, "about Iran? There’s not a lot to speak to. We don’t want to speak to them. We’re not looking to meet or anything." Bessent is expected to speak with fellow finance ministers at a Group of 20 gathering in Asheville, North Carolina.

Why It Matters

The International Monetary Fund expects the Iranian economy to contract 5.4 percent this year. Inflation is running near 90 percent by the Iranian government’s own Statistical Center. Floating storage of Iranian oil has drained from 105 million barrels to fewer than 40 million.

The scale of these economic indicators reflects the pressure facing Iran, yet the continued operation of banks and flight routes suggests gaps in enforcement. The reliance on China for oil exports and the lack of formal guidance for partners like Turkey indicate questions about the completeness of the embargo. The upcoming G20 gathering provides a forum for Bessent to seek broader alignment, but unilateral actions by countries like Pakistan demonstrate the limits of US leverage.

Timeline

On February 28, 2026, President Donald Trump launched a war alongside Israel in late February. On August 24, 2026, Treasury Secretary Scott Bessent announced a new set of sanctions against Iran.