Donald Trump vows to hit Iran hard economically amid escalating conflict

President Donald Trump is doubling down on his promise to punish Iran through its wallet. Treasury Secretary Scott Bessent announced a sweeping new package of economic isolation measures against Iran on August 13, 2026, describing them as the “financial equivalent” of military operations.

The measures fall under what the administration has branded “Operation Economic Fury,” combining intensified sanctions with a naval blockade of the Strait of Hormuz. The goal is straightforward: cripple Iran’s oil sector and the infrastructure that supports it.

What the new sanctions look like

Bessent made clear that these aren’t your standard-issue sanctions. The Treasury Department is rolling out secondary sanctions that will target any foreign entities, including banks and individuals, that engage with Iran’s oil sector. That means countries still buying Iranian crude aren’t just risking diplomatic awkwardness. They’re risking access to the US financial system.

The US Navy is currently maintaining a blockade in the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil passes daily.

Trump himself has been publicly threatening to “hit Iran hard” economically and militarily since March 2026. His administration views Iran’s already deteriorating economic indicators, particularly high inflation and shrinking oil exports, as leverage points to force Tehran back to the negotiating table on nuclear and regional security issues.

How we got here

The relationship has been on a downward trajectory since the US withdrawal from the Joint Comprehensive Plan of Action, the 2015 nuclear deal, during Trump’s first term. The months leading up to Bessent’s announcement saw fluctuating military engagements and diplomatic negotiations that ultimately went nowhere. A memorandum of understanding reached in June 2026 collapsed, removing what had been the last diplomatic guardrail between the two countries. Direct military exchanges followed, and the US asserted an expanded naval presence in the region.

What this means for markets and beyond

Intensified sanctions aimed at squeezing Iranian supply out of global markets could push crude prices higher, particularly if enforcement against secondary violators proves effective. Countries that have quietly continued purchasing discounted Iranian oil, often routed through intermediaries and grey-market channels, will face a harder calculation about whether the savings are worth the risk of US financial penalties.

For global banks, the secondary sanctions regime creates a compliance minefield. Any institution with exposure to Iranian oil transactions, even indirectly through correspondent banking relationships, could find itself in the Treasury Department’s crosshairs.

The wildcard remains Iran’s response. Tehran has historically used asymmetric tactics, from proxy attacks on Gulf shipping to cyberattacks on financial infrastructure, when cornered economically.

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