IRAN VOWS DEVASTATING RESPONSE TO NEW U.S. SANCTIONS THREAT

Developing story: The sanctions package is expected Monday, and Iranian, Chinese or Gulf responses could quickly change the risk picture.

Iran warned Friday that it would deliver a “devastating” response to new U.S. threats as Washington prepared what Treasury Secretary Scott Bessent described as the toughest sanctions ever imposed on Tehran. The warning moved the post-deadline conflict further into a phase of economic warfare, military deterrence and pressure on countries that still trade with Iran.

Reuters reported that Bessent plans to detail the measures on Monday after President Donald Trump warned of economic consequences for any country providing what he called a lifeline to Iran. The package has not yet been released, so its practical reach remains unclear. But the public message is already severe: Washington is trying to cut Iran’s economic channels while continuing the blockade on Iranian ports.

Iran’s military response was equally stark. Major General Ali Abdollahi, chief of staff of Iran’s armed forces, said Iran was prepared across land, sea, air, air defense and cyberspace to respond with crushing and punishing force, according to Iranian media cited by Reuters. The threat did not identify a specific target, but it was broad enough to cover Gulf shipping, regional bases, cyber systems and allied infrastructure.

The confrontation matters because it is no longer only about military strikes or ceasefire language. The United States is now emphasizing sanctions, commercial isolation and pressure on third countries, while Iran is treating economic pressure as part of the war. That increases the chance that a sanctions announcement could be followed by military or proxy retaliation.

The Strait of Hormuz remains the central battlefield for leverage. Reuters reported that only seven commodity ships sailed along the waterway on Thursday, far below the more than 130 daily crossings before the war. A route that once carried roughly one-fifth of global oil and liquefied natural gas flows remains commercially unreliable even when individual vessels continue to pass.

China is central to the pressure campaign because it has been the dominant buyer of shipped Iranian oil. Reuters reported that more than 80 percent of Iran’s shipped oil was destined for China in 2025, according to Kpler data. Bessent urged Beijing to cooperate with the U.S.; China said sanctions and pressure would not help resolve the dispute.

The risk for Washington is that maximum pressure can produce unpredictable retaliation before it produces concessions. Iran has endured decades of sanctions, but the current conflict combines sanctions with damaged infrastructure, constrained oil exports and disrupted shipping. That makes Tehran’s choices more dangerous as its economic lifelines narrow.

What is confirmed is that Washington is preparing a major sanctions announcement and that Iran has threatened a broad, devastating response. What remains unresolved is the content of the sanctions package, whether China or Gulf states cooperate with it, and whether Iran answers the economic campaign with military action, cyber activity or further disruption at sea.

Fact-check date: August 21, 2026. Article type: News. Sources: Reuters; Associated Press; U.S. Department of the Treasury. Developing note: The sanctions package is expected Monday, and Iranian, Chinese or Gulf responses could quickly change the risk picture.