US Sanctions Iran's Payment Ecosystem—China's Choice: China's Oil Deals with Iran's Iran's

The United States has shifted its strategy toward Iran from military action to economic warfare, announcing a new sanctions package targeting Iran's financial ecosystem. Treasury Secretary Bessent declared the "Operation Economic Outcast" on August 24, expanding secondary sanctions to digital assets, technology, gold, aviation, and shipping. The new measures aim to cut off Iran's entire payment and brokerage networks, not just individual companies, by threatening to exclude third-country entities from the U.S. financial system. Approximately 60 individuals, firms, and vessels were also sanctioned for supporting Iran's nuclear, missile, or oil smuggling activities. China, which purchases 80-90% of Iran's oil, remains the key variable. The U.S. has not yet sanctioned major Chinese banks, with experts divided on whether Washington will cross that threshold given potential impacts on trade talks and President Xi's upcoming visit.