Signs point to the potential efficacy of the strategy, despite the many doubts of anti-Trump media outlets.

Unexpectedly, Treasury Secretary Scott Bessent has opened a new front in the war against Iran. 

Operation Economic Outcast seeks to isolate Tehran financially, eliminate its oil revenue and punish the foreign institutions that keep its sanctions-evasion networks alive. Bessent calls it an “economic D-Day.” The comparison is evocative, but the underlying strategy could prove effective.

The objective is not simply to add more Iranian names to an already enormous sanctions list: Iran has survived sanctions for decades by using front companies, exchange houses, false shipping registries and intermediaries across Asia and the Middle East. Operation Economic Outcast instead targets the entire commercial chain through which Iranian oil becomes money — and money becomes missiles, domestic repression and support for terrorism.

“We intend to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent declared.

Several early signs suggest the strategy is already producing results. 

Iran’s central-bank governor reportedly acknowledged that the American blockade has reduced Iranian oil exports to zero. The United Arab Emirates announced that it was halting trade and financial transactions with Tehran. Bessent strongly suggested that this decision followed direct American pressure.

Meanwhile, Iran’s currency has crossed two million rials to the dollar, compared with approximately 1.4 million at the beginning of the year and 70,000 when President Donald Trump withdrew from the nuclear agreement in 2018. Inflation is ravaging household budgets. Electricity shortages persist. The government is considering politically dangerous cuts to fuel subsidies.

Even senior Iranian officials are publicly acknowledging the approaching crisis. President Masoud Pezeshkian recently said the war eventually must end. Parliamentary speaker Mohammad Bagher Ghalibaf was more explicit: “No matter how much military power we have, if people are hungry and we don’t have financial circulation, economic growth and domestic production, we will not endure.”

These are hardly signs of an American strategy having no effect.

Nevertheless, some anti-Trump commentators declared Operation Economic Outcast an empty threat almost as soon as Bessent announced it. Their principal evidence was his response when asked why he had not immediately imposed maximum secondary sanctions against every foreign institution doing business with Iran.

“Why would I want to blow up the global financial system?” Bessent replied.

It was an elegant answer, and not an admission of helplessness. Secondary sanctions are powerful precisely because international banks cannot afford to lose access to the American financial system and the dollar. Used indiscriminately, they could disrupt legitimate commerce, increase oil prices and damage American companies. Used methodically, the threat itself may persuade banks and governments to abandon Iran without requiring Washington to detonate its largest financial weapons.

That is the purpose of Bessent’s “cure period.” Countries have been given private deadlines to terminate prohibited activities. President Trump is reportedly calling foreign leaders personally. If they refuse to comply, Bessent says Washington will act unilaterally.

This resembles sensible escalation more than timidity. Treasury immediately sanctioned nearly 60 Iran-linked individuals, entities and vessels. Bessent also promised action against a financial institution before the end of the week. The importance of that institution will offer an early indication of the administration’s seriousness.

China remains the greatest test. 

Small Chinese “teapot” refineries have purchased much of Iran’s illicit oil, while Chinese institutions help move the resulting money. Washington can sanction minor companies relatively easily. Targeting a major state-connected bank would risk Chinese retaliation and potentially disturb global markets.

Bessent does not need to begin by sanctioning China’s entire banking system. He must demonstrate that participation in Iranian oil transactions brings escalating consequences. If Beijing believes the administration will punish only disposable shell companies, it will simply rearrange the network. If internationally exposed Chinese banks believe they could lose access to dollars, most will conclude that Iran is not worth the risk.

Critics correctly observe that sanctions have not brought down the Islamic Republic during the past 47 years. But Operation Economic Outcast is not occurring under ordinary circumstances. Iran has sustained extensive military and infrastructure damage. Its ability to threaten shipping through the Strait of Hormuz appears diminished as the United States escorts increasing quantities of oil. Tehran’s currency is collapsing while the blockade attacks its principal source of foreign revenue.

Sanctions alone may not have broken Iran. A blockade, military damage and comprehensive secondary sanctions working together could produce a different result.

The administration must nevertheless remain disciplined. Tehran will probably alternate between provocation and conciliatory messages delivered through mediators such as Pakistan and Qatar. It may offer limited concessions intended to divide Washington from its partners and obtain temporary sanctions relief. Trump should remain open to a serious settlement without surrendering permanent leverage for another temporary pause.

Regime collapse is also possible, but it cannot be treated as a complete strategy. Washington must prepare for securing nuclear materials, encouraging defections without empowering the Revolutionary Guard and helping Iranians determine their own political future.

Operation Economic Outcast has not yet won the war. It has, however, exposed Tehran’s vulnerability at a moment when Iran has fewer ways to defend itself economically. The early signs are sufficiently encouraging that dismissing the campaign as another Trump bluff reveals more about the critics’ assumptions than it does about Bessent’s plan.

The prudent verdict is neither triumph nor failure. It is that the strategy is underway, the pressure is registering, and Iran’s leaders appear considerably more worried than Trump’s media critics are willing to admit.

(Contributing writer, Brooke Bell)