Politics 5 min read By Callum Montgomery
US sanctions target Iran's economic lifelines as inflation and protests mount
Washington expands secondary sanctions against Iran, targeting digital assets, gold, technology, aviation and shipping. Analysts say these measures hit ordinary citizens hardest as inflation tops 80% and protests spread among workers.
The United States has announced a sweeping expansion of sanctions against Iran, with Treasury Secretary Scott Bessent describing the measures as an «economic D-Day» aimed at further isolating the regime. The new policy widens the use of secondary sanctions against entities and countries that engage with Iran, and threatens to remove any nation that helps Tehran from the dollar-based financial system.
Bessent specifically targeted five of Iran's «most vital lifelines»: digital assets, technology, gold, aviation and shipping. However, Esfandyar Batmanghelidj, founder and CEO of the Bourse & Bazaar Foundation think tank, argued that these are lifelines for the Iranian people rather than the regime. «Digital assets and gold are how ordinary Iranians protect their savings from inflation,» he wrote on X. «Technology keeps Iranians connected with the world. Aviation keeps Iranian families connected with loved ones across borders. Shipping is how essential goods, including food and medicine, reach Iran.»
The move marks a strategic pivot by the Trump administration away from military confrontation, with economic warfare now expected to achieve what bombs and missiles could not. The Treasury Department did not respond to a request for comment on the new measures.
Iran's economy was already in severe distress before the current conflict, and the combination of war and a US naval blockade has inflicted a catastrophic toll. Inflation has soared above 80%, with prices for certain food staples rising by 100%. The currency, which collapsed late last year and triggered nationwide protests, has lost a further 30% of its value this year. The International Monetary Fund projected in April that Iran's economy would shrink by 6.1% this year, the worst contraction in decades. A labour ministry official estimated that more than one million jobs had been lost by late May.
The naval blockade has prevented Iran from exporting oil through its ports while also blocking imports of refined fuels, creating shortages and long queues at petrol stations. Deep subsidies that encourage excess consumption have worsened the problem, but the government is reluctant to raise prices for fear of provoking further public anger.
Moderate officials have begun to acknowledge the severity of the situation. Parliamentary speaker Mohammad Bagher Ghalibaf, who also serves as Iran's chief negotiator, said while visiting Iraq that military strength alone cannot sustain the country. «No matter how strong we are militarily, if the people are hungry and we do not have financial circulation, economic growth and domestic production, we will not endure,» he said.
Protests have started to emerge, though not yet at the scale seen in January, when the government launched a brutal crackdown that killed thousands. On Monday, oil and gas workers in Asaluyeh staged a protest, saying they should not have to suffer a cost-of-living crisis while keeping oil production online, according to state media. Earlier, about 100 laid-off workers protested at the Shadegan steel complex in western Iran, petrochemical workers in Bandar-e Mahshahr demonstrated against their layoffs, and teachers union members have publicly complained about unpaid wages.
The United Arab Emirates also shut down all trade and transactions with Iran earlier this month, cutting off a vital channel for engagement with the global economy. Experts caution that Iran's repressive regime is unlikely to be swayed by the suffering of ordinary citizens and may be prepared to wait out economic hardship longer than Americans can endure high petrol prices. Ghalibaf acknowledged the strains on Wednesday, saying the country faces «great, complex, and multiple open and hidden challenges» and that the government's duty is to devote all its time and energy to resolving the people's problems and increasing Iran's economic power.
