US shifts Iran pressure from battlefield to financial system

Economic punishment is the theme of this week’s war updates. With US-Iran talks still in limbo, Washington has shifted its pressure campaign from the battlefield to the financial system, but the pressure is piling onto Tehran’s trading partners more than Tehran itself.

Washington plans to unleash what President Donald Trump called “Economic D-Day” on Iran, with Treasury Secretary Scott Bessent promising to announce the “toughest sanctions in history” next Monday. The real test of the move is China, which buys some 80% of Iran’s oil exports and has so far stayed neutral and whose embassy in Washington has said “sanctions and pressure do not help resolve the problem.”

The US separately hit Hezbollah with sanctions that officials explicitly said was not part of the promised Iran package, Reuters reports. The sanctions saw Washington redesignating Hezbollah for acting “under the command of Iran’s Islamic Revolutionary Guard Corps-Quds Force” and naming 10 alleged cash couriers, including a Turkish businessman accused of running money between the region and Lebanon through Istanbul exchange houses.

The US’ sanctions promise came on the heels of the UAE severing trade and financial ties with Iran, after the first direct attack on its territory in months — even as Tehran denied involvement. The move ended a détente that some reports had attributed to the UAE offering Iran “financial facilities,” a claim officials have now rejected. Anwar Gargash, diplomatic adviser to Sheikh Mohamed bin Zayed Al Nahyan, took to X to call it false and the product of “desperate media campaigns” — the same campaigns, he said, behind rumors that Egyptian workers were losing residencies without notice while on leave.

The picture in Hormuz isn’t looking much better, either. Just seven commodity ships transited the Strait of Hormuz yesterday, half the previous day’s count, according to Kpler data. No very large crude carriers or LNG tankers were among those transiting. Before the war began in February, the waterway carried nearly a fifth of global crude and LNG shipments. Traffic at Bab Al Mandeb also thinned to 23 vessels from 34 on each of the two previous days. Meanwhile, Yemen’s Houthis said yesterday they had launched two drone attacks on Saudi Arabia, hitting Najran airport and an Aramco facility, Reuters reports.

Meanwhile, the proposed Gaza International Stabilization Force is getting more than USD 206 mn in spending from Washington, the Trump administration told Congress, marking the first real spending put behind a plan that has been stalled for months.