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Tehran, Iran – Iranians are preparing for further economic pain as the United States gets ready to announce a new round of punishing sanctions on Iran.
US Treasury Secretary Scott Bessent is expected to announce new economic measures against the country on Monday, designed to “squash” the Iranian economy and “collapse” the government.
US President Donald Trump has also warned of an “economic D-Day”, with the US preparing the most potent financial measures against any country, aimed at Iran.
But analysts say the penalties are unlikely to change the behaviour of Iran, already one of the most sanctioned countries in the world.
Banks, oil buyers and refiners, shipping companies, registries, ports, airports, exchange houses, front companies and potentially governments facilitating Iranian trade could be exposed to secondary sanctions by Washington.
In a social media post on Monday, Trump claimed Iran was “completely collapsing”.
The country has been subject to a “maximum pressure” campaign by the US since Trump’s first term in office in 2018.
This followed the US’s unilateral withdrawal from a nuclear deal signed three years earlier between Iran and world powers.
This had lifted United Nations sanctions imposed on Iran in return for verified curbs on Iran’s nuclear programme.
Iran has responded to economic penalties by the US and its allies with a complex sanctions-evasion system. Among these are a shadow tanker fleet, ship-to-ship transfers of oil, shell companies, and alternative payment and barter mechanisms.
A naval blockade enforced by the US military on Tehran has physically stopped most Iran-linked ships from transiting through the country’s southern ports.
The US Central Command said on Sunday that its forces have redirected 70 commercial vessels, disabled three, and boarded two as part of the blockade, which it says could last indefinitely.
But Iran’s extensive land borders and railway lines, as well as access to the Caspian Sea in the north, gave Tehran more leeway to circumvent this.
Umud Shokri, energy strategist and senior visiting fellow at George Mason University, said that Iran has now become quite adept at finding ways around US sanctions.
“Iran has learned how to survive under pressure, although survival is not the same as avoiding economic damage,” he told Al Jazeera.
The Iranian rial continued to fall to a new all-time low on Monday, hitting a rate of 2.03 million rials against the US dollar in Tehran’s open market, as Iranians’ purchasing power weakens.
‘Language of force’
Senior military commanders in Iran remain defiant and have even indicated a more aggressive approach to deter the US from enacting more sanctions.
Mohsen Rezaei, the new secretary of Iran’s Supreme National Security Council, warned countries that if they back the new US economic measures, they will be considered enemies of Tehran.
“If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf,” he said on Sunday.
Rezaei is considered part of the “old guard” of Iran’s Islamic Revolutionary Guard Corps (IRGC), which has consolidated power around the office of new Supreme Leader Mojtaba Khamenei.
Army chief Amir Hatami told a group of commanders during a speech on Monday that forces are prepared to “fight for 10-20 generations” if necessary.
“The only way is to make [the US] understand through a language of force that they cannot do what they intend” in Iran and the Strait of Hormuz, he said.
Iran’s Persian Gulf Strait Authority, established by military authorities to exert control over the Strait of Hormuz, has listed its own planned actions against ships in the vital waterway.
But President Masoud Pezeshkian said it is better to end the war with the US now in a position of strength.
Others have voiced concerns about the impact the conflict is having on Iran’s economic situation.
Another sign of Iran’s economic problems is the blackouts that regularly plague cities in the resource-rich country, and a range of planned austerity measures by the government.
Iran’s options facing the sanctions
In recent years, Iran has increased trade with China, Russia and other countries.
It has also relied on using local currencies, barter measures, intermediaries and discounts as a way around the sanctions.
Tehran has also expanded overland regional commerce via Iraq, Turkiye, Pakistan, the Caucasus and Central Asia. But the measures have not been able to make up for lran’s losses in oil income, hence the repeated domestic shocks.
Shokri said China is by far Tehran’s most important economic lifeline, due to the scale of its demand for Iranian oil. This has provided Tehran with a degree of protection, but even China has its limits.
“Beijing may oppose US sanctions politically, while major Chinese banks and globally exposed companies still avoid transactions that could threaten their access to the US financial system,” Shokri said. “Smaller refiners and less internationally exposed firms are usually more willing to take that risk.”
China’s Foreign Ministry said on Monday that sanctions and pressure will escalate tensions rather than solve the conflict.
Shokri said Central Asian countries and Azerbaijan can help Iran diversify transport and trade routes, but they lack the economic scale of China.
“So Iran’s strongest protection comes from China, while Turkiye, Iraq, the UAE, and other regional partners are more likely to reduce exposure if secondary sanctions become sufficiently credible and costly,” he said.
