The United States is preparing to impose what officials describe as an unprecedented level of economic pressure on Iran, as the conflict between the two countries — now entering its seventh month — shows no sign of resolution. Treasury Secretary Scott Bessent announced plans to "sever every economic lifeline" sustaining the Islamic Republic, with formal measures expected imminently. Iran's top security official responded by warning that Tehran would treat any country's support for the new measures as "an act of war" and threatened to halt all oil exports from the Persian Gulf.
The Strait of Hormuz, a narrow waterway between Iran and Oman that carries roughly a fifth of the world's traded oil and is one of the most strategically critical shipping lanes on earth, has been at the centre of the standoff since the United States and Israel launched strikes on Iran on 28 February. No attacks on commercial vessels were confirmed in the strait over the past 48 hours, but tensions remained elevated. Iran's newly created Persian Gulf Strait Authority — itself already under US sanctions — published a list of dozens of vessels it claims violated transit arrangements, threatening them with fines or seizures. Iran and Oman are now in active discussions over the management of the waterway, including the possibility of ships paying transit fees. Omani Foreign Minister Badr al-Busaidi is due in Tehran on Tuesday for further consultations, and Pakistani army chief Field Marshal Asim Munir also visited the Iranian capital as part of regional efforts to bring both sides back to the negotiating table.
Diplomacy has not entirely collapsed. A memorandum of understanding signed in mid-June opened a 60-day window for talks on ending the conflict and reaching an agreement on Iran's nuclear programme, but that period expired last week without a breakthrough. Iranian President Masoud Pezeshkian defended the accord, saying it was the best path out of a situation of "neither war nor peace" and insisting it did not amount to capitulation. His security chief, Mohsen Rezaei — a former Revolutionary Guard commander recently appointed to a senior role in what analysts have read as a hardening of Tehran's stance — struck a more combative tone, warning of "seismic" retaliation if Washington pressed ahead.
The conflict has also reshaped global energy markets. The closure of the Strait of Hormuz to normal commercial traffic has caused significant disruption to oil flows and refining capacity worldwide, with knock-on effects for prices and supply chains far beyond the region. Meanwhile, the US Navy said its blockade of Iranian ports had redirected 70 commercial ships and disabled three as of Sunday.
The escalation comes against a backdrop of continuing unrest inside Iran. Authorities executed a man arrested during nationwide protests in January, according to the Iranian judiciary, in the latest in a series of such cases. The cumulative effect of sanctions, conflict, and internal repression has left Iran unable to attract foreign investment, as President Pezeshkian himself acknowledged — underlining why, despite the hardline rhetoric, some in Tehran are pressing for a negotiated way out.