US President Donald Trump's administration has stepped up its campaign to isolate Iran economically, warning countries and businesses that continue to maintain financial and commercial links with Tehran that they could face American sanctions. The latest move, announced by US Treasury Secretary Scott Bessent on August 24, comes under "Operation Economic Outcast", a campaign aimed at cutting Iran off from the revenue and financial channels that support its economy.
The US Treasury said it has sanctioned nearly 60 individuals, entities and vessels linked to Iranian oil revenues, nuclear and missile procurement and cyber operations. Washington has also expanded the potential reach of secondary sanctions to five sectors — digital assets, technology, gold, aviation and shipping.
The pressure is not limited to Iran itself. Washington is also seeking to force countries that continue doing business with Tehran to scale back those links, creating a difficult choice for some of Iran's biggest trading partners.
China Faces The Biggest Pressure
China is arguably the most exposed country, largely because it is Iran's biggest buyer of oil. Reuters reported that Chinese purchases accounted for a major share of Iran's seaborne crude exports, with average purchases estimated at about 1.38 million barrels per day in 2025.
The US has already targeted Chinese entities involved in Iranian oil trade. However, Beijing has continued to oppose unilateral US sanctions, making China a particularly sensitive test for Washington's strategy.
Recent disruptions have nevertheless affected Iranian oil flows to China. Reuters reported that Iranian shipments had fallen sharply, while Chinese independent refineries were looking for alternative sources as supplies tightened.
UAE Has Already Taken A Major Step
The United Arab Emirates (UAE) is another crucial link in Iran's regional trade network. But unlike China, the UAE has already moved to suspend trade and financial transactions with Iran following renewed regional tensions.
The decision is significant because Dubai has traditionally served as an important commercial and financial route for Iranian businesses. The disruption could therefore affect not only Iranian companies but also businesses in other countries that have used the UAE as a transit point.
Why India Is Also Vulnerable
India's exposure is smaller than China's but significant for specific sectors. Indian exporters of rice, tea and pharmaceuticals have traditionally relied heavily on Dubai for shipments and financial transactions connected to Iran.
According to Reuters, India's exports to Iran are expected to face further disruption following the UAE's suspension of trade and the latest US sanctions. India exported around $383 million worth of rice and $14 million of tea to Iran in early 2026. Indian exporters are now considering alternative routes, including Turkey.
India's broader trade relationship with Iran has already declined sharply. Bilateral trade fell from around $17 billion in 2018-19 to $1.63 billion in 2025-26, with current trade largely focused on humanitarian goods.
The latest restrictions could increase shipping, insurance and payment costs for Indian exporters. The impact could be particularly relevant for India's basmati rice industry, which has traditionally supplied the Iranian market.
Turkey, Iraq And Other Partners Also At Risk
Turkey remains another important Iranian trading partner, with bilateral commerce estimated at around $5-6 billion annually. Unlike the UAE, Turkey has not indicated that it intends to completely halt trade with Tehran.
Iraq also has substantial economic ties with Iran and depends on Iranian gas for part of its electricity requirements. Pakistan, Oman, Armenia and Azerbaijan have smaller but significant economic connections with Tehran as well.
The US Treasury has warned that entities facilitating money laundering or sanctions evasion for Iran could lose access to the American financial system. Washington has also given countries timelines to shut down activities it considers to be supporting Tehran.
Iran, meanwhile, has vowed to retaliate against the expanded US sanctions. The latest confrontation therefore goes beyond Washington and Tehran, with the pressure increasingly affecting the countries and businesses that form part of Iran's international trade network.
.jpg)
