Iran on August 21 stated that its response to any new US threats would be “devastating”, after Washington promised to impose the toughest financial sanctions in history aimed at overthrowing Iran’s leadership.
Statements by US Treasury Secretary Scott Bessent, made on August 20, came after a warning from President Donald Trump about economic consequences for any country providing Iran with “any support”. Bessent promised to reveal details of the new measures on August 24.
The Chief of Staff of Iran’s Armed Forces, Major General Ali Abdollahi, stated that Tehran’s reaction would be broad and decisive. “Given the readiness on land, sea, air, in air defense, and cyberspace, Iran’s armed forces will give a devastating, punitive, and destructive response to the enemy’s new threats”, Iranian media quoted Abdollahi as saying.
Influential Speaker of the Iranian Parliament Mohammad Bagher Ghalibaf, who is the chief negotiator in mediation talks with the US, stated that Washington seems to have concluded that it cannot win in a direct military confrontation. “We must develop plans to counter and overcome unjust sanctions”, he said during a visit to neighboring Iraq, accusing the US and Israel of waging what he called economic and “cognitive” warfare.
Impact on the oil market and military confrontation
Oil prices stabilized on August 21 but remained on track for a second consecutive weekly increase due to concerns about energy exports from the Persian Gulf. On August 20, oil reached a more than three-week high after the threat of sanctions aimed at forcing Iran to agree to end a conflict that has blocked millions of barrels of Middle Eastern oil.
“I’m not sure why oil jumped because of this”, Bessent said in an interview with CNBC. He added that “if we apply maximum economic pressure, it means there probably won’t be a large-scale resumption of hostilities”, using a term related to the use of military force.
In a war that has drawn in Persian Gulf countries and shocked markets, thousands of people have died. Iran has demonstrated its ability to restrict shipping through the Strait of Hormuz—a waterway through which about one-fifth of all globally traded oil passed until February. The US and Iran have twice announced ceasefire agreements—in April and June—to restore free navigation through the Strait of Hormuz and bring an end to the nearly six-month conflict. However, both agreements quickly collapsed.
History of sanctions and the US ‘double strike’
Iran has lived under almost continuous harsh economic sanctions for nearly 50 years—since the Islamic Revolution of 1979. Before Bessent’s speech, Iran’s Foreign Ministry condemned the US economic and trade sanctions, calling them “economic terrorism” that would not “create even the slightest hesitation in the Iranians’ resolve to defend Iran’s independence, dignity, and national sovereignty”.
Bessent told CNBC that he would reveal additional details of the new package and “explain what exactly we are going to do” regarding Iran at a press conference on August 24. “This is a double strike. We have a blockade (against Iran), and we will have the toughest sanctions in history”, he added, referring to the US naval blockade imposed on Iran in April and suspended for a month in mid-June. “This will work in Iran, and we will overthrow this regime. It’s time for our allies and the rest of the world to make a decision”, he stated.
President Trump is under domestic pressure to end the war, as high fuel prices are lowering his approval ratings and potentially threatening his Republican Party’s control of Congress in the midterm elections in November.
China’s position and reduction of oil supplies
China buys over 80% of Iran’s seaborne-exported oil, according to data from the analytical company Kpler for 2025. When asked if the US could take measures against China for doing business with Iran, Bessent replied that many conversations are better held privately. “Keep in mind that the Chinese get 50% of their energy from the Persian Gulf. So it would be a great service for them to join the program”, he said.
The Chinese Embassy in Washington stated that “sanctions and pressure do not help solve the problem”. “China urges the relevant parties to take responsible measures and resolve the issue through political and diplomatic means”, a embassy spokesperson reported.
Offers of Iranian crude oil to Chinese buyers have already decreased, and prices have risen this week as the US blockade of Iranian ports, resumed on July 13, has reduced Tehran’s supplies, trading sources told Reuters.
