The USA has introduced a slew of recent financial sanctions towards Iran and threatened international locations it trades with, aiming to choke Tehran’s financial system because the months-long battle stays deadlocked.
A minimum of 60 entities throughout the Center East, Asia and Europe have been focused within the newest sanctions as a part of the financial strain marketing campaign that might additional disrupt power markets and rattle the worldwide financial system.
The US-Israel struggle launched on February 28 has already resulted in a spike in oil costs and disruption in world provide chains because of the blockade of the Strait of Hormuz, by means of which a fifth of worldwide oil and fuel beforehand handed.
On this explainer, we break down how secondary sanctions work, and when the US has used them up to now.
What has the US threatened Iran’s buying and selling companions with?
The Trump administration has already been waging an financial strain marketing campaign towards Iran below the banner of “Operation Financial Fury”, because the launch of the struggle in February.
Nonetheless, the US has just lately determined to up the ante with “Operation Financial Outcast”, concentrating on international locations that commerce with Iran as properly.
US Treasury Secretary Scott Bessent said on Monday that the US would goal all of Iran’s sources of income, together with oil, to stop different international locations and corporations from doing enterprise with Tehran.
“Across the globe, our goal is to sever each financial lifeline that sustains this tyrannical regime till Tehran stands alone,” he mentioned.
He mentioned international locations all over the world should select between the US and Iran, stressing that the brand new marketing campaign exposes Tehran’s commerce companions to secondary penalties.
Bessent added that if international locations and entities “facilitate transactions and are a part of the ecosystem that turns Iranian oil into cash, into repression, they are going to be focused”, he mentioned.
Requested why the US is threatening Iran’s enterprise companions as a substitute of penalising them, Bessent mentioned: “Effectively, we’re giving everybody the chance to treatment dangerous behaviour. Why would I wish to blow up the worldwide monetary system?”
Bessent’s newest statements are a follow-up to US President Donald Trump’s Fact Social publish on August 19, the place the president introduced what he referred to as the “most crushing financial operation” towards Iran.
“ANY nation that permits its monetary establishments, companies, airports, or authorities entities to supply any kind of lifeline to Iran will itself face TREMENDOUS Financial Penalties,” Trump wrote.
What are secondary sanctions?
The US has lengthy used threats of what are often known as secondary sanctions – wherein international locations that commerce with a sanctioned nation additionally face sanctions.
For example, secondary sanctions are in place towards the acquisition of Iranian oil or heavy army gear from Russia: international locations, firms and people that interact on this commerce are liable to US sanctions.
How do they work?
The US’s predominant leverage is entry to its market and monetary system.
For example, even when an Indian financial institution has no direct relationship with Iran, it might face secondary sanctions if it processes funds for an Indian agency buying and selling with Tehran, particularly if that financial institution has US branches, greenback‑clearing ties or American purchasers.
That danger makes establishments hyper‑cautious, avoiding something that even touches Iran for worry of being swept up in US penalties.
The specter of secondary US sanctions can also be why most world banks and monetary establishments not take part in commerce with Russia or Iran – they don’t wish to danger shedding enterprise within the US.
How have secondary sanctions been used up to now?
In 2017, Trump’s first administration authorised the Countering America’s Adversaries By Sanctions Act (CAATSA), concentrating on Iran, Russia and North Korea.
Below CAATSA, the US focused particular international locations with secondary sanctions. In 2018, it focused the Gear Improvement Division (EDD) of the Chinese language army because of its purchases of Russian Su-35 fighter jets and S-400 missile methods.
In 2020, Washington used the CAATSA sanctions to target NATO-member Turkiye’s Presidency of Defence Industries, the nation’s army procurement company, alongside some officers affiliated with it. This got here a yr after the US barred Turkiye from procuring US F-35 fighter jets.
Turkiye was earmarked for its buy of the Russian S-400 air defence system in 2019. Trump’s calculus was that the S-400s have been incompatible with NATO gear and a probably threatened allied safety.
These sanctions made Turkiye cautious about making future purchases. In July 2026, Trump mentioned he would lift sanctions on Turkiye and would quickly resolve on resuming gross sales of F-35s.
Any transfer to return Turkiye to the F-35 programme would want to beat a 2020 regulation requiring a presidential administration to find out that Ankara not possesses or operates the Russian methods.
Whereas the CAATSA sanctions have been extremely focused, it’s unclear whether or not any sanctions imposed on Iran’s buying and selling companions can be.
Who’re Iran’s predominant buying and selling companions?
In 2024, Iran exported some $56bn value of products to no less than 112 international locations and territories, in accordance with official customs figures. In the identical yr, Iran imported about $68.5bn value of products from no less than 87 international locations and territories.
Its high export companions have been China, Iraq, the United Arab Emirates, Turkiye and Afghanistan. Its high import companions have been the UAE, China, Turkiye, the European Union and India.
Washington’s leverage over Iran’s buying and selling companions is contingent on the buying and selling companions’ reliance on the American monetary system. For a number of sectors in China and Russia, this reliance is minimal. Therefore, analysts say that Trump’s leverage over China and Russia is restricted.
These sectors embody most of China’s oil refineries. In accordance with analytics agency Kpler, China purchased 80 p.c of Iran’s shipped oil in 2025.
Paul Musgrave, an affiliate professor of presidency at Georgetown College in Qatar, informed Al Jazeera final week that “it’s going to be very tough” for Trump to drag off his strain marketing campaign successfully.
Analysts say China might additionally hit again if the US sanctions its banks for processing Iranian funds, because the US Treasury has threatened.
