US Expands Iran Sanctions Threat, Targeting Global Trade Partners

The announcement comes almost six months into a war in the Middle East that has reached a stalemate, with peace talks stalled and Tehran blocking most traffic through the crucial Strait of Hormuz. Presenting the planned economic pressure as the “endgame,” US Treasury Secretary Scott Bessent said expanded secondary sanctions would target Iran's digital assets, technology, gold, aviation and shipping sectors.

The United States also imposed new sanctions on 60 individuals, companies and vessels allegedly involved in helping Iran generate oil revenue, procure weapons and conduct cyber operations. The measures target entities around the world, including in the United Arab Emirates (UAE), Hong Kong, China, Singapore and Europe.

The expanded sanctions threat could place several of Iran's major trading partners, including China and India, on a collision course with Washington. China, the UAE, Turkey, Iraq, the European Union, India, Pakistan and the Russian Federation are among Tehran's biggest trading partners.

China is Iran's largest trading partner, accounting for nearly one-third of the country's non-oil foreign trade. It is also the biggest buyer of Iranian oil, accounting for nearly 90 per cent of its oil exports, according to US government data.

Beijing reported .96 billion in bilateral trade with Tehran in 2025. According to the U.S.-China Economic and Security Review Commission, however, that figure excluded roughly .2 billion in unreported Iranian crude oil exports to China that year.

Kpler estimates that China bought an average of 1.38 million barrels per day of Iranian oil in 2025. It noted that independent Chinese refiners take Iranian oil in bulk, often rebranding it as Malaysian or Indonesian crude and settling through intermediaries outside the dollar system.

In April, the US Treasury imposed sanctions on a Chinese independent refinery for buying billions of dollars' worth of Iranian oil and warned Chinese banks of secondary sanctions if they facilitated trade in Iranian oil.

Beijing has openly opposed US sanctions against Iran and said it would safeguard its interests. “China has already stated many times that it firmly opposes illegal unilateral sanctions... China will take all necessary measures to firmly safeguard its own rights and interests,” foreign ministry spokesman Lin Jian said at a regular news briefing.

The United Arab Emirates, located just 50 miles from Iran across the Persian Gulf, has long served as a major trading hub for Tehran. Bilateral trade reached around $28 billion in 2024, when the Emirates was Iran's largest source of imports, contributing more than 30 per cent, according to World Trade Organization data.

The UAE was also Iran's third-largest export destination, accounting for 12 per cent of its shipments and totalling more than $7 billion.

That relationship suffered a setback last week when the UAE moved to suspend all trade and financial transactions with Iran after two ballistic missiles were fired toward Emirati territory, one of which targeted UAE-owned tankers.

Iran has relied on UAE banks and its financial system to access the world economy through illicit, often murky transactions. Cutting Iran off would require more forceful action by Emirati authorities to crack down on opaque financial and trading activity, according to the US-based think tank The Washington Institute.

“The majority of Iran's transshipment, smuggling, and shadow banking activity takes place in Dubai, so Washington must do what it can to help the UAE's national leaders in Abu Dhabi convince and cajole Dubai's leaders to play ball,” Matthew Levitt, a former U.S. Treasury official, wrote in a note on Monday.

Turkey also maintains significant commercial ties with Tehran, importing Iranian natural gas and exporting manufactured goods south.

Turkey-Iran bilateral trade reached $5.7 billion in 2024, according to the Turkish Ministry of Foreign Affairs. Ankara's exports mainly comprise machinery and parts, chemical and agricultural products, while its imports from Tehran include energy products.

Under a 25-year gas supply contract between the two countries that expired at the end of July, Turkey's imports of Iranian gas increased sharply this year, while Iran's share of Turkey's total natural gas imports rose to 18.6 per cent.

Although Ankara has sought to diversify its supplies by increasing pipeline imports from Azerbaijan and Russia, it has so far not signalled that it intends to cut Iran off.

Iraq, which depends on Iranian electricity and gas, has historically conducted billions of dollars in trade with Tehran. Iran renewed a five-year contract in March 2024 to supply Iraq with up to nearly 660 billion cubic feet of natural gas a year. Electricity imports from Iran accounted for more than 30 per cent of Iraq's electricity generation in 2023, according to the US Energy Information Administration.

Iraq-Iran trade reached more than $10 billion in 2025, according to Reuters, with Tehran exporting food, consumer goods and other products to the Iraqi market. The trade has declined this year amid increased security risks in the region and intermittent disruptions along border crossings since the war started in late February.

Iraq reportedly pays Iran around $4 billion to $5 billion a year for natural gas used for electricity generation. The fresh US sanctions could curtail Baghdad's payments for Iranian energy.

India, another of Iran's top five trading partners, has seen bilateral trade with Tehran decline in recent years to around $1.6 billion in the year ending March 2026, according to India's Department of Commerce. The figure was down from $2.3 billion in the year through March 2023.

New Delhi primarily exports rice, tea, sugar and pharmaceuticals to Iran and imports dry and fresh fruits from the country. In April, India resumed importing crude oil from Iran following a seven-year halt after the US temporarily lifted sanctions on Iranian crude exports.

Those trade flows could now face renewed pressure if Washington follows through on its threat to sanction any entity, including Indian refiners, that has procured Iranian energy.

With Washington expanding secondary sanctions across digital assets, technology, gold, aviation and shipping while targeting entities involved in Iran's oil revenue generation, weapons procurement and cyber operations, the measures could place Tehran's major trading relationships under growing pressure and test the willingness of countries such as China, the UAE, Turkey, Iraq and India to maintain commercial ties with Iran.