Iran’s Warning Signals a Wider Economic War Over Gulf Trade and Regional Alliances

Iran’s warning that countries joining the United States’ “economic war” would be treated as enemies revealed a conflict moving beyond direct U.S.–Iran military confrontation. The struggle is increasingly about who controls Iran’s remaining trade channels, which states will enforce Washington’s isolation campaign, and how far Tehran is prepared to go to make that cooperation costly.

Washington is turning trade with Iran into a liability

President Donald Trump has threatened “tremendous economic consequences” for countries that do business with Iran. Treasury Secretary Scott Bessent has separately promised sanctions that he described as the toughest in history, with the stated aim of intensifying pressure on Tehran while reducing the need for further major military operations. 12

That approach depends on more than restricting Iran directly. It also seeks to pressure banks, companies, shipping firms and governments that could keep Iranian commerce moving. The administration has discussed secondary sanctions against financial institutions and other entities doing business with Iranian-linked people, firms and ships. 6

For Tehran, the implication is clear: neutrality may become harder for neighboring countries to maintain. Iran’s warning was an attempt to raise the potential cost of cooperating with Washington before additional restrictions could close off more of its commercial relationships.

The UAE shows how military escalation can produce economic isolation

The United Arab Emirates suspended trade, commercial exchanges and financial transactions with Iran until further notice, citing renewed regional escalation and a missile threat from Tehran. 3

The decision illustrates the feedback loop at the center of the confrontation. Iranian military pressure can make neighboring states feel compelled to distance themselves from Tehran. That economic distancing then reinforces the isolation Washington is trying to create, giving Iran an incentive to threaten the very states whose cooperation it needs.

The warning therefore reflected both strength and vulnerability. Iran retains ways to threaten regional interests and shipping, but using those tools risks accelerating the loss of trade and financial access.

Iran’s economic strain is shaping its strategy

Public statements from Iranian officials have acknowledged that the war and blockade are creating serious domestic pressure. President Masoud Pezeshkian said the government faced financial constraints, while Parliament Speaker Mohammad Bagher Ghalibaf warned that military strength would mean little if people were hungry and the economy lacked circulation, growth and domestic production. 2125

An analysis from the Institute for the Study of War also described a widening divide between officials focused on managing the economy and figures resisting concessions. Those economic officials reportedly warned that worsening pressure could threaten regime stability and advocated ending the war to reduce its cost. 23

That helps explain Tehran’s dual message. Iran is signaling that it will retaliate against countries supporting the U.S. campaign, while also leaving room for negotiation. The threats are not evidence that Iran can absorb unlimited pressure; they may instead be an effort to improve its bargaining position before its economic options narrow further.

China limits—but does not eliminate—U.S. leverage

China is the most important potential outlet for Iranian oil. Reuters, citing Kpler data, reported that China buys more than 80% of Iran’s shipped oil, while Beijing has argued that sanctions and pressure will not resolve the dispute. 17

But Chinese opposition does not guarantee that Iranian exports will continue at previous levels. Trade sources reported that Iranian crude offers to Chinese buyers had declined and prices had risen as the U.S. blockade restricted Tehran’s shipments. 19

That distinction matters. China can resist formally joining the U.S. sanctions campaign, yet shipping restrictions, financial risks and the threat of penalties can still reduce the volume of Iranian oil reaching buyers. The result is pressure on Iran’s primary source of hard currency even without complete international agreement. 19

Why the warning matters now

Diplomatic efforts have stalled, while Washington is preparing another round of economic measures and Iran is threatening a severe response. 522 The confrontation is consequently shifting toward a contest over economic survival, maritime access and third-country alignment.

Iran’s message to its neighbors was therefore more than a warning against sanctions. It was a declaration that participation in the U.S. pressure campaign could be treated as an act of hostility. But it also exposed the central risk for Tehran: retaliation against regional trade partners may make the economic isolation it fears happen faster.

The immediate question is not simply whether sanctions will hurt Iran. It is whether pressure and counterpressure will produce a diplomatic opening—or create a widening regional cycle in which every new restriction invites a new threat to trade, shipping or neighboring states.