The Biggest Victims Of Trump’s Economic D-Day On Iran

A New Economic Offensive

The Trump administration has launched what Treasury Secretary Scott Bessent called "an economic onslaught" against Iran, with sanctions aimed at the country's trading partners. President Donald Trump has warned that any country providing Iran an economic lifeline would face severe consequences, putting the UAE, Turkey, India, Pakistan and Oman in the frame. The first round of sanctions targeted nearly 60 individuals, companies and vessels, expanding across shipping, aviation, technology, gold and digital assets, but left China's major banks untouched, according to a report from Crude Oil Prices Today | OilPrice.com.

Washington's most powerful weapon, access to the U.S. financial system, underpins the strategy. The dollar's status at the center of global trade gives the Treasury unique reach, and Iraq serves as a case study in how far that leverage can go.

Iraq: A Case Study in Dollar Leverage

Since the 2003 invasion, the United States has held effective control over Iraq's oil revenue dollars, primarily through the Federal Reserve Bank of New York, according to two sources. Iraq, an ally of both Washington and Tehran, holds more than $100 billion in reserves in the U.S. and relies on American goodwill to keep its oil revenues flowing. Washington has already sanctioned a host of Iraqi banks accused of doing business with Tehran, though it has avoided measures that would devastate Iraq's economy.

The U.S. has also wielded that leverage directly. In April, the U.S. halted a $500 million cash shipment to Iraq and suspended parts of security cooperation to pressure Baghdad over Iran-backed militias, and in January Washington reportedly threatened senior Iraqi politicians with sanctions. Reuters reported in late 2024 a fuel oil smuggling network generating at least $1 billion a year for Iran and its proxies in Iraq.

Iraq's trade with Iran reached more than $10 billion in 2025, mainly Iranian exports of food and consumer goods, but that trade has fallen as the war and blockade have intensified. Iraq pays Iran $4 billion to $5 billion a year for natural gas, on which it relies for as much as 40% of its electricity generation, according to OilPrice.com.

The vulnerability stems from more than just the scale of the trade, according to Neil Quilliam of Chatham House: Iraq's dependence on access to the U.S.-led financial architecture makes it uniquely exposed. Tom Keatinge of RUSI described Iraq as "an effective sanctions-evasion route" for Iran, a point underscored by the disclosed oil smuggling activity. A fuel oil smuggling network generating at least $1 billion a year for Iran and its proxies has been detailed in reporting.

China: The Biggest Prize

China purchases an estimated 80% to 90% of Iran's seaborne crude, making it the largest source of hard-currency revenue for Tehran, according to both OilPrice.com and the Jerusalem Post. Chinese imports reached 1.58 million barrels per day earlier this year before the war and blockade began squeezing flows, falling to roughly 534,000 barrels per day in August from 823,000 barrels per day in July, according to Reuters figures.

The Treasury has so far stopped short of sanctioning major Chinese banks, with Besson saying "Why would I want to blow up the global financial system?" and promising a major announcement involving a financial institution by the end of the week, as reported by OilPrice. The Treasury has warned two larger Chinese banks they could face secondary sanctions if Iranian funds are found moving through their systems, according to Reuters.

Analysts, however, question how effectively the pressure can be applied. The Jerusalem Post notes that China has figured out how to ``dodge" America's blockade with shadow fleet maneuvering, making it uncertain whether the United States could or would deploy force against Chinese ships in the Strait of Hormuz. The paper's analysis suggests the campaign may have started with "a whimper" rather than impact.

Other trading partners under pressure

Turkey: Turkey imported 4.5 bcm of Iranian gas in the first half of the year, a 34% year-on-year increase that eclipsed Russian supplies. A 25-year deal to buy up to 9.6 bcm per year expired at the end of July 2026, leaving trade plans in flux.

India: India imported $707 million worth of Iranian oil in the first half of 2026, according to government data cited by Reuters. Bilateral trade collapsed to $1.63 billion in the 2025/26 fiscal year from $17 billion in 2018/19. India's remaining trade is heavily weighted toward Indian exports like rice, tea and pharmaceuticals, much of it routed through Dubai.

The United Arab Emirates: The UAE suspended all financial and economic dealings with Iran on August 19 after it detected two ballistic missiles launched from Iran toward maritime traffic near its waters," according to OilPrice. In 2024, the UAE exported roughly $21 billion in goods to Iran, about 30% of Iranian imports.

The Hormuz choke point and gas prices: The war has partially closed the Strait of Hormuz, with shipping at a fraction of normal levels. According to the Jerusalem Post, the strait saw 100 or more ships per day before the war, dropping to a low of about 30 at the lowest point, up to 50 exiting and 20 entering in July, and back to around 30 now. Average daily shipping is down to around 10% of prewar levels. American gas prices have reflected the backdrop: they rose from $2.80 pre-war to $4.50, fell to $3.80 in July, and are back to $4.05, according to the same source.

Effectiveness Questioned

The headers of the campaign are already subject to debate. The Jerusalem Post asks whether the economic campaign has ``dropped with a bit of a whimper'' and raises doubts about whether the United States can sustain months of pressure. The paper's analysis questions whether resolutions can succeed given Iran's ability to rebuild its missile program since a 2026 war. It says Iran's missile stockpile has fallen from 2,500-3,000 to under 1,000, possibly several hundred, but that Trump's stated goal to remove Iran's enriched uranium stockpile has not been achieved.

Despite the initial caution of the first round, the targets are now on notice: the trading partners of Iran face increasingly difficult choices if Washington moves beyond the networks it has already sanctioned to the banks and companies that still have much to lose. The question is whether China, the UAE, Turkey, India, and others will bend to Washington's will, or as one contributor proposed, find ways to keep their economies moving as the noose tightens.