What Bessent’s “Toughest Sanctions” on Iran Could Mean

Scott Bessent’s planned 2 p.m. EDT press conference on Monday, August 24, is expected to turn the Trump administration’s broad threats against Iran into a more specific economic strategy. Bessent has described the approach as a combination of the existing blockade and “the toughest sanctions in history,” while suggesting that stronger economic pressure could reduce the need for renewed large-scale U.S. military operations. 12

The important caveat is that the package has not yet been published. Its scale, legal design and enforcement targets therefore remain uncertain.

What the sanctions are likely to target

Based on Bessent’s public comments, the measures are likely to focus on the channels that keep Iran’s economy connected to global trade:

• Iranian oil sales and the revenue they generate
• Shipping companies, tankers and maritime intermediaries
• Banks, payment systems and other financial channels
• Insurers and traders that support Iranian commerce
• Foreign companies or governments that provide Tehran with an economic “lifeline”

The most consequential step would be the use of secondary sanctions—penalties against non-Iranian entities that continue doing business with Tehran. Reporting on the administration’s plan says Washington is pressing allies to choose between cooperation and continued trade with Iran. 5614

That would move the policy beyond simply restricting Iranian institutions. It would make access to the U.S.-linked financial system and markets part of the pressure on Iran’s partners as well.

Why China is the central test

China is the most important potential target because it buys more than 80% of Iran’s shipped oil, according to data cited by Reuters. That makes Chinese refiners, traders, banks, shipping firms and payment arrangements central to any attempt to cut off Iran’s remaining oil income.

Beijing has not endorsed Washington’s sanctions strategy. Reuters reported that China said sanctions would not help resolve the conflict, while China and Pakistan have supported renewed peace talks. 1

There are already signs that the risk is affecting the oil trade. Offers of Iranian crude to Chinese buyers declined and prices rose after the U.S. blockade restricted shipments, according to trade sources cited by Reuters. Chinese state-controlled shipping companies have also reportedly avoided the Strait of Hormuz and Bab al-Mandab because of heightened security risks.

That leaves Washington with a difficult choice. Limited enforcement may fail to change Tehran’s calculations. Aggressive enforcement against Chinese-linked trade could produce a confrontation with Beijing, disrupt additional oil flows and make diplomatic mediation harder.

What the measures could do to Iran

A tighter sanctions regime would add pressure to an economy already operating under severe restrictions and a naval blockade. It could reduce Iran’s access to hard currency, make imports more expensive, disrupt banking and force more trade into opaque or informal channels.

The immediate effect would not necessarily be political capitulation. Economic isolation can weaken a government’s resources, but it can also shift costs onto civilians, strengthen black-market networks and encourage leaders to present outside pressure as an attack on national sovereignty. The available reporting supports the expectation of greater economic strain, but it does not establish that sanctions would quickly collapse Iran’s government. 212

Iranian officials have already rejected the framing of the new measures. Foreign Minister Abbas Araghchi has called sanctions “economic terrorism,” while Tehran has demanded negotiations based on mutual respect, justice and national honor rather than a settlement that appears to follow coercion. 2

The largest escalation risk is still Hormuz

The sanctions announcement comes as shipping through the Strait of Hormuz is already severely restricted. Reuters reported that traffic had approached a near standstill after ship attacks and U.S. threats to maintain the blockade indefinitely. Oil flows through the strait—which averaged about 18 million barrels per day before the war—fell sharply in July and remained much lower in August, according to Reuters analysis.

Iranian officials have threatened retaliation if neighboring countries participate in the U.S. economic campaign. Mohsen Rezaei has warned that Iran could target oil-export routes outside the strait as well as traffic through Hormuz if Gulf states join the sanctions effort.

Those threats create a risk of escalation beyond Iran’s own exports. If tankers, alternative pipelines or Gulf infrastructure become targets, the result could be higher oil prices, more expensive freight and insurance, and a larger risk premium on Middle Eastern energy supplies. Reuters reported that oil markets were increasingly pricing the Hormuz disruption as a prolonged problem rather than a short-lived shock.

The practical impact of new sanctions may therefore be partly determined by what happens at sea. If Iranian exports are already heavily constrained by the blockade, additional financial penalties may have a smaller immediate effect on physical supply—but a larger effect on the companies and countries trying to work around the restrictions.

Diplomacy is weaker, not impossible

The June interim framework did not produce a durable settlement. The 60-day ceasefire period was not extended, and the two sides have disagreed over responsibility for the breakdown and the conditions for reopening Hormuz. Iran has said the strait will remain closed until Washington lifts the blockade, removes oil sanctions, releases frozen assets and ends military operations.

China and Pakistan remain relevant because both have supported a diplomatic route. Pakistan has explored a path toward renewed U.S.–Iran talks following a push initiated by China, although Pakistani officials said an end to attacks on Saudi Arabia and other Gulf states would be a prerequisite for progress.

A sanctions package that leaves room for exemptions, negotiations or monitored shipping could preserve that pathway. A campaign that treats every major Iranian trading partner as an adversary would make mediation more difficult and could reinforce Tehran’s argument that Washington seeks surrender rather than a negotiated settlement.

What to watch after Monday’s announcement

The rhetoric will matter less than the implementation details. The key questions are:

1. Are the measures new, or do they mainly tighten existing sanctions? The legal authorities and enforcement mechanisms will show how much additional pressure is actually being created.
2. Do they directly target China-linked oil trade? This is likely to be the clearest test of Washington’s willingness to accept friction with Beijing.
3. How broad are the secondary sanctions? The number and type of foreign companies, banks, insurers and shipping firms at risk will determine the policy’s reach.
4. Are there humanitarian or diplomatic carve-outs? Exemptions could limit civilian harm and preserve room for talks, though they may also reduce the package’s coercive force.
5. How does Iran respond at sea? New attacks, threats against alternative export routes or restrictions on navigation would quickly turn a sanctions announcement into a wider energy-market crisis.

The strategic outcome will depend on enforcement, not the phrase “toughest sanctions in history.” Washington may be trying to replace or limit large-scale combat with economic isolation, but the policy’s success will hinge on China’s response, Iran’s ability to evade restrictions and whether pressure produces negotiations—or a broader confrontation around the Gulf.