Iran war enters a dangerous new phase as Trump launches ‘economic D-Day’

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The Iran war is entering a potentially decisive new phase — and this time the main battlefield is the global economy.

With the military campaign having failed to force Tehran into submission, the Trump administration is preparing what Treasury Secretary Scott Bessent describes as an unprecedented financial assault designed to sever Iran’s remaining economic lifelines.

Bessent says Washington is entering the “endgame”, with new sanctions expected to target not only Iran but companies, banks and countries that continue doing business with Tehran. President Donald Trump has dubbed the campaign an “economic D-Day”.

But Tehran is threatening to respond with its most powerful weapon: oil.

Trump turns from bombs to economic warfare

The Trump administration now appears to be betting that financial pressure can achieve what military strikes have not.

Bessent has promised sanctions on a scale he says has never been seen before, aimed at cutting Iran off from petroleum sales, financial transactions and the international networks that keep its economy functioning. Washington is also pressing China and other countries to cooperate with the campaign.

The strategy represents a major shift.

Rather than immediately escalating the bombing campaign, Washington is attempting to squeeze Iran until its economy can no longer sustain the war — or its government can no longer withstand the pressure.

But there is a huge question hanging over the strategy.

Iran has lived under heavy sanctions for decades and has repeatedly demonstrated an ability to adapt, evade restrictions and keep its economy functioning despite enormous pressure.

The question now is whether Trump can finally push the regime beyond that point.

Tehran threatens to turn Hormuz into a weapon

Iran's answer has been anything but surrender.

Mohsen Rezaei, Tehran's security chief, has warned that any country helping impose the new American economic restrictions could be treated as an enemy.

He has threatened retaliation against the interests of countries that cooperate with Washington — and warned that Iran could halt oil exports from the Gulf entirely if the economic war continues.

That threat matters because the Strait of Hormuz remains the biggest pressure point in the entire conflict.

Traffic through the waterway has increased somewhat, but it remains dramatically below normal levels. CNN reported that traffic was running at roughly 20% of the seven-day pre-war average, while Reuters reported that fewer than 20 ships crossed during the weekend.

And now Iran's parliament is advancing plans for ships allowed to pass through the strait to pay for services provided by Tehran.

In other words, Hormuz is becoming not simply a military chokepoint, but an economic bargaining chip.

One threat could trigger another

This creates a dangerous chain reaction.

Trump wants Iran's oil revenues strangled.

Iran threatens to prevent oil from leaving the Gulf.

Washington wants other countries to help isolate Tehran.

Iran threatens to treat those countries as enemies if they participate.

Every move intended to increase economic pressure therefore carries the possibility of widening the war.

Iran's security chief has already warned that retaliation against countries supporting the sanctions could be “seismic”, while Tehran has threatened to target the interests of governments that refuse to step aside from Washington's campaign.

That is a particularly ominous message for America's Gulf partners.

Iran admits the country is under full-scale pressure

Iranian President Masoud Pezeshkian has acknowledged that his country is facing a full-scale economic, military and security war.

The admission comes as Iran's economy struggles under mounting pressure, with the rial badly weakened and inflation remaining extremely high.

Yet Tehran is showing no sign of simply folding.

Iranian officials have dismissed the new American sanctions as desperate and insist that Washington will not succeed in bringing the regime to its knees.

That sets up the central gamble of Trump's new strategy.

Can Washington inflict enough economic pain to force Tehran to surrender — before Iran uses Hormuz to inflict enough pain on the rest of the world to make the sanctions politically and economically unsustainable?

The oil shock could become the next battlefield

The danger extends far beyond Iran.

The Strait of Hormuz is one of the world's most important energy arteries, and any further reduction in tanker traffic threatens to push oil prices higher and increase pressure on economies already struggling with inflation.

Markets have already reacted nervously to the confrontation. Reuters reported that oil prices rose as investors assessed Trump's threats against countries supporting Iran and the possibility of further disruption.

That gives Tehran a powerful form of leverage.

Iran may be economically weaker than the United States, but it does not need to defeat America economically. It only needs to make the cost of the confrontation high enough for Washington and its allies to start questioning whether the strategy is worth it.

The great question: who blinks first?

That is what makes the latest escalation so important.

Trump is effectively betting that Iran will break before the wider world does.

Tehran is betting that the opposite will happen — that shutting down or restricting Hormuz will create enough economic pain internationally to force Washington to reconsider.

The United States is trying to squeeze Iran's economy.

Iran is threatening to squeeze the world's energy supply.

And sitting between the two is the Strait of Hormuz, where even a limited disruption can send shockwaves through oil markets, shipping and inflation.

For now, neither side is backing down.

Bessent says America is entering the “endgame”.

Iran says the economic war could bring a response against the entire Gulf.

The next phase of the Iran conflict may therefore be fought not with missiles over Tehran, but with sanctions in Washington, tankers in Hormuz and oil prices on trading screens around the world.

And that could prove just as dangerous.

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