Middle East war: Iran vows to retaliate after US widens sanctions

Iran is pledging to fight back against expanded US sanctions aimed at isolating its economy, expressing confidence that major trading partners will resist Washington’s pressure campaign.

Almost six months into a conflict the US has struggled to resolve, Treasury Secretary Scott Bessent unveiled the measures on Monday but stopped short of the most punishing sanctions.

While he said countries that continued trading with Iran risked being forced out of the dollar-based financial system, he declined to give a timeline or identify which might be targeted, saying he would give them time to comply with the new directive.

“Why would I want to blow up the global financial system?” he said when asked why the measures had not gone further.

The Treasury Department did announce new sanctions on 60 individuals, entities and vessels, but the list did not feature any of the Chinese financial institutions suspected of facilitating Iran’s oil trade.

“We want to make clear here today that no one is above the reach of US sanctions,” Bessent said in response to a question about Chinese banks.

China has been the biggest buyer of Iranian oil for several years, although the US blockade of Iran’s ports has cut Iranian oil flows to China since Washington renewed it in mid-July.

Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks in September between President Donald Trump and Chinese President Xi Jinping, with any curbs on China’s exports of critical minerals especially sensitive.

China said on Tuesday that its co-operation with Iran was conducted within the framework of international law and should not be interfered with or disrupted.

An oil tanker was struck on Tuesday by an unidentified projectile and disabled 17km northeast of Oman’s Ash Shishah, which lies at the entrance to the Strait of Hormuz, the United Kingdom Maritime Trade Operations said.

Before news of the latest sanctions, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in retaliation for any US economic measures.

After they were unveiled, Iranian Economy Minister Ali Madanizadeh said that Iran was prepared.

“Our defence is no longer so defensive; the enemies should wait for an attack,” he told state television.

Neither China nor Russia had “accepted” the US measures, he said, predicting that other countries would resist them.