From Chinese banks to the "shadow fleet": How the US plans to drain Iran
The US administration has announced plans to implement unprecedented economic isolation measures against Iran to force a ceasefire. Analysts are assessing the potential success of these steps, given Iran's reliance on China and its established financial workarounds.
US Treasury Secretary Scott Bessent stated on Friday that the US is preparing to implement measures "that have never been seen in Iran." According to him, the strategy involves a combination of total economic isolation and a continued blockade in the Strait of Hormuz to prevent any traffic from entering or leaving Iranian ports.
Bloomberg analyzed Bessent's announcement, noting a degree of skepticism regarding the move's success. The most sensitive point for Iran is China, which purchases over 90% of Iranian oil exports. Sanctions against intermediaries in these purchases would directly hit Tehran's revenues. Since the start of the American campaign against Iran in late February, sanctions have been imposed on smaller Chinese refineries, but Washington has so far refrained from targeting the major Chinese banks that finance the trade. Such a move could exacerbate tensions with Beijing ahead of a planned meeting between President Donald Trump and Chinese leader Xi Jinping, while also pushing up global oil prices.
Another focus area is exchange houses, primarily in the UAE, which help Iran convert payments received in Chinese yuan into usable currencies. While the Treasury Department has targeted these links as part of Bessent's "Economic Fury" campaign, Iran has spent years building alternative channels, meaning the closure of individual exchange houses will likely shift activity to new intermediaries or digital assets.
Other options under consideration include:
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Secondary sanctions on any entity doing business with Iran, similar to the 2017 measures against North Korea.
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Seizure of Iranian state assets within US jurisdiction.
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Expansion of measures against the Iranian "shadow fleet," targeting not just vessels but the companies, terminals, and infrastructure that enable their operations.
"Unless the president decides to prioritize the Iranian threat over all other issues, and above all China, it is unlikely that any step taken will fundamentally change Iran's calculations," concluded Bloomberg analyst Chris Kennedy.
