Iran vows to resist expanded US sanctions as Washington signals push for renewed talks

CAIRO/WASHINGTON | Iran has vowed to retaliate against expanded U.S. sanctions aimed at isolating its economy, while signaling that it may be willing to resume negotiations with Washington as Pakistan steps up mediation efforts to prevent further escalation and reopen the strategically vital Strait of Hormuz.

The conflicting signals came as the United States expanded its economic pressure on Tehran but stopped short of imposing some of the most severe measures it had threatened. U.S. Treasury Secretary Scott Bessent said countries that continue doing business with Iran could face penalties that would restrict their access to the U.S.-dominated financial system, although Washington did not immediately identify which countries would be targeted or when the penalties would take effect.

Iranian Economy Minister Ali Madanizadeh said Tehran was prepared to respond. “The enemies should wait for an attack,” he said on Iranian state television, according to Reuters. He also said China and Russia had not accepted the U.S. measures and predicted that other countries would resist the pressure campaign.

The latest confrontation comes nearly six months into the war between Iran and the United States and Israel, with the conflict having severely damaged Iran’s conventional military capabilities, weakened its economy and disrupted energy shipments across the Gulf. Reuters reported that thousands of people have been killed during the conflict, most of them in Iran and Lebanon.

At the same time, Tehran appears to be leaving the door open to diplomacy. Iranian parliamentary foreign relations committee chairman Abbas Golroo said Pakistan’s army chief, General Asim Munir, carried a U.S. message during his visit to Tehran on Monday. Golroo said the message appeared intended to revive a political process that had stalled. There was no immediate public response from the White House or the U.S. State Department.

A Pakistani government source told Reuters that Iran had expressed a general willingness to resume peace talks during meetings with Pakistani officials. Pakistan reportedly told Iranian officials that Washington was prepared to reverse its latest sanctions either before or during a new round of negotiations.

Pakistan said its latest discussions with Iran had produced “significant progress” and focused on preventing further escalation and reopening the Strait of Hormuz. Pakistani Interior Minister Mohsin Naqvi described the discussions as constructive, while an official in Iranian President Masoud Pezeshkian’s office said the visit had produced valuable diplomatic results whose details would be announced later.

The diplomatic activity is unfolding alongside a major new U.S. sanctions campaign. The Treasury Department announced sanctions against nearly 60 individuals, companies and vessels that it said were supporting Iranian military, cyber, financial and oil-related activities. The measures target networks connected to Iran’s ballistic missile and nuclear procurement programs, cyber operations and the international shipping and financial networks involved in Iranian oil sales.

More than 20 of the newly sanctioned individuals and entities are based in the Middle East and Asia and are accused by the U.S. Treasury of providing financial or logistical assistance to Iranian nuclear research and missile development. Several China-based companies were also targeted over alleged supplies of dual-use goods to an Iranian technology institute.

The sanctions also extend pressure on Iran’s oil trade. U.S. authorities targeted vessel brokers, bunkering companies and financial intermediaries based in places including the United Arab Emirates, Singapore and Hong Kong. Five tankers were designated as part of what the Treasury described as an Iranian “shadow fleet.”

Washington also expanded the activities that could expose foreign companies and individuals to secondary sanctions. The areas identified include digital assets and cryptocurrency, gold, technology, aviation and shipping. Foreign entities accused of helping Iran evade sanctions or launder money could ultimately be cut off from the U.S. financial system.

However, the measures announced Monday were less sweeping than some investors had anticipated. Bessent did not identify specific countries that would immediately face penalties, saying instead that governments and companies would be given time to comply. Reuters reported that the sanctions list did not include Chinese financial institutions suspected of facilitating Iranian oil trade.

China’s role is particularly important because it has been Iran’s largest oil customer for several years. Beijing said Tuesday that its cooperation with Tehran is conducted within the framework of international law and should not be disrupted. The United States is also seeking to manage its broader relationship with China, with President Donald Trump expected to host Chinese President Xi Jinping next month.

The sanctions dispute has immediate implications for global energy markets because the conflict has drastically reduced traffic through the Strait of Hormuz, the narrow waterway between Iran and Oman that links the Persian Gulf with the Gulf of Oman and the Arabian Sea.

Before the current conflict, roughly one-fifth of the world’s petroleum liquids consumption passed through the strait. The U.S. Energy Information Administration estimated that oil flows averaged about 20 million barrels per day in 2024. In the second quarter of 2026, however, flows through Hormuz averaged only about 4.9 million barrels per day, compared with 21.6 million barrels per day in the fourth quarter of 2025 before the conflict began.

Reuters reported that provisional Vortexa data showed oil transits through Hormuz at about 5 million barrels per day on Monday, compared with more than 20 million barrels per day before the war. Only two commodity vessels crossed the strait that day, the lowest daily number since early May, according to shipping data cited by Reuters.

The risks were underscored Tuesday when an oil tanker was struck by an unidentified projectile about 9 nautical miles, or roughly 17 kilometers, northeast of Oman’s Ash Shishah near the entrance to the Strait of Hormuz, according to the United Kingdom Maritime Trade Operations. Oman’s foreign minister was also in Iran on Tuesday to discuss future arrangements for the waterway.

Iran has several possible ways to escalate if the economic pressure intensifies. Former Revolutionary Guards commander Mohsen Rezaei has threatened to stop all oil exports through the Strait of Hormuz and elsewhere in the Persian Gulf if what he described as an economic war continues. Iranian attacks and threats against shipping have already sharply reduced traffic through the waterway.

Tehran could also increase attacks against energy infrastructure in Gulf countries, including oil and gas facilities, electricity systems and water desalination plants. Reuters reported that such attacks could create wider economic consequences because Gulf states are major suppliers of energy and important financial centers.

Cyber operations are another potential avenue. Britain said Monday that Iran-linked hackers had disrupted a small electricity station, while U.S. officials have attributed cyberattacks against water facilities in Minnesota to Iran. Tehran has not commented on those allegations. Western security agencies have also accused Iran of attempting to recruit operatives for attacks or assassinations in Western countries, allegations Iran has denied.

Despite the risks, financial markets initially interpreted the latest U.S. measures as less threatening to oil supplies than a renewed military offensive. Brent crude fell about 3% Tuesday to $89.42 a barrel, while U.S. West Texas Intermediate fell about 3.1% to $82.34, according to Reuters. Analysts said the shift toward economic pressure reduced some immediate fears of a broader military escalation, although the threat to shipping through Hormuz remains.

The confrontation is rooted in a much longer dispute between Iran and the United States, particularly over Iran’s nuclear program. In 2015, Iran and six world powers, including the United States, China, Russia, Britain, France and Germany, concluded the Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal. The agreement placed limits on Iran’s nuclear activities in exchange for sanctions relief and was subject to international monitoring by the International Atomic Energy Agency.

The United States withdrew from the agreement in May 2018 under President Trump and began restoring sanctions that had been lifted under the deal. The U.S. Treasury subsequently reimposed extensive restrictions on Iran’s energy, shipping and banking sectors.

The IAEA reported that after the U.S. withdrawal, Iran began reducing its implementation of nuclear-related commitments under the agreement in 2019. The agency later reported that Iran had stopped implementing those commitments altogether in 2021, further complicating international efforts to resolve the nuclear dispute.

The current crisis therefore combines several longstanding disputes: Iran’s nuclear program, U.S. sanctions, regional military confrontation and control of one of the world’s most important energy corridors.

For now, Iran is threatening retaliation while simultaneously signaling an interest in renewed negotiations. Washington is tightening economic pressure but has left some of its strongest threatened measures in reserve. Pakistan is attempting to bridge the gap, while China remains a crucial economic partner for Tehran.

The immediate test will be whether diplomacy can gain momentum before another attack on shipping or critical infrastructure triggers a wider escalation. With Hormuz traffic already severely restricted and the global energy market sensitive to any further disruption, the consequences of failure would extend well beyond Iran and the United States.