Tehran, August 21, 2026: Iran on Friday warned that any fresh US threats would draw a “devastating” response after Washington said it planned to impose what it described as the toughest financial penalties in history in an effort to topple the Iranian leadership.
US Treasury Secretary Scott Bessent said details of the planned sanctions would be announced on Monday. The move follows President Donald Trump's warning of economic consequences for any country providing “any type of lifeline to Iran.”
The Chief of Staff of Iran's Armed Forces, Major General Ali Abdollahi, said Tehran's response would be broad and decisive.
"With preparedness across land, sea, air, air defence and cyberspace, Iran's armed forces will respond to the enemy's new threats with crushing, punishing and devastating responses," Abdollahi was quoted as saying by Iranian media.
Iranian Parliament Speaker Mohammad Baqer Qalibaf, the country's main negotiator in mediated talks with the US, said Washington appeared to have concluded that it could not prevail through direct military confrontation.
"We must make plans to deal with the unjust sanctions so that we can overcome them," Qalibaf said in Iraq, accusing the US and Israel of resorting to economic and “cognitive” warfare.
Oil Markets React As Hormuz Traffic Slumps
Oil prices steadied on Friday but remained on course for a second consecutive weekly rise amid concerns over energy exports from the Gulf. Prices had reached a more than three-week high on Thursday following the US sanctions threat.
Bessent played down concerns that the measures would drive oil prices higher.
"I'm not sure why oil has popped up on this," Bessent told CNBC. "If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart," he said, referring to the possible use of military force.
Only seven commodity ships sailed through the Strait of Hormuz on Thursday, half the previous day's number, according to data from shiptracker Kpler. More than 130 ships a day used the route before the war.
Thousands of people have been killed in the nearly six-month-old conflict, which has drawn in Gulf countries and pushed up global fuel prices as Iran targeted shipping through the Strait of Hormuz. Before February, the waterway carried about a fifth of all traded oil.
The US and Iran announced ceasefire agreements in April and June in attempts to restore the free flow of shipping through Hormuz and move towards ending the conflict, but both deals quickly collapsed.
Iran's Foreign Ministry, meanwhile, said US sanctions would not "create even the slightest hesitation in Iranians’ determination to safeguard Iran’s independence, dignity and national sovereignty."
US Says Sanctions And Blockade Aim To Pressure Tehran
Bessent said he would provide full details of Washington's strategy at a press conference on Monday.
"We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision," he said, describing a naval blockade reimposed on Iran in July and the "toughest sanctions in history" as a "one-two punch".
Iran has faced extensive economic sanctions for nearly 50 years since the 1979 Islamic Revolution. Its population is also grappling with high inflation, a weakening currency, energy shortages and damaged infrastructure.
Some Iranians interviewed by Reuters said additional economic pressure could deepen hardship, weaken the clerical establishment and trigger unrest. However, there has been no sign of renewed unrest since a deadly crackdown on protests in January.
Trump is also facing pressure to end the war as high fuel prices weigh on his approval ratings and could affect the Republican Party's control of Congress in the November midterm elections.
China Trade Emerges As Key Test Of US Pressure
Offers of Iranian crude to Chinese buyers have already declined since the US reimposed its blockade on Iranian ports in mid-July, according to trade sources cited by Reuters.
China buys more than 80% of Iran's shipped oil, according to 2025 data from analytics firm Kpler. However, stronger US economic pressure on Beijing carries the risk of retaliation.
Asked whether Washington could target China for continuing to do business with Iran, Bessent said some discussions were better conducted privately.
"Keep in mind that the Chinese get 50% (of their) energy... from the Gulf. So it would do them a big service to get with the program," he said.
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China's embassy in Washington said "sanctions and pressure do not help resolve the problem", and called for diplomatic means.
Further sanctions also carry risks for US allies in the Gulf, where energy facilities and desalination plants that supply drinking water have come under Iranian attack.
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