WireAugust 15, 2026 at 5:30 PM
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The Treasury Department is developing plans to further isolate Iran economically, focusing on the financial conduits that allow Tehran to access oil revenues despite existing sanctions and a naval blockade. Treasury Secretary Scott Bessent has indicated preparations for unprecedented pressure, but the path forward is fraught with risks to American workers at the pump and tense diplomatic negotiations with China.
China purchases over 90% of Iranian oil exports, providing a critical revenue stream to Tehran. While Washington has sanctioned individual Chinese refineries since kinetic operations began, the administration has so far refrained from targeting the major state-linked Chinese banks that finance the trade. Hitting these institutions would directly sever a financial lifeline, but Treasury must weigh this against domestic economic interests. Curtailing Iranian barrels would remove discounted crude from the global market, exerting upward pressure on energy costs for American consumers and businesses. Furthermore, such a move risks derailing a planned summit between President Trump and Xi Jinping, complicating the administration’s broader priority to counter Beijing.
China’s biggest banks are caught between Beijing’s directive and the risk of losing access to the US financial system.
Washington is also scrutinizing exchange houses in jurisdictions like the United Arab Emirates that repatriate oil proceeds into usable currency for Iran. Treasury’s “Economic Fury” campaign has already sanctioned several of these intermediaries, but the regime has spent years building informal networks and alternative channels, likely pushing more transactions into digital assets and opaque hawala systems rather than halting the flow entirely. Another option under review is a sweeping secondary sanctions campaign akin to the 2017 model deployed against North Korea, which would force all foreign commercial entities to choose between access to the American market and any business with Iran. This would extend pressure to U.S. partners, including Turkey, and carries the risk of fracturing alliances while offering no guarantee of altering Iran's strategic calculus.