President Donald Trump announced what he called the "most crushing economic operation ever taken against any country," declaring "economic warfare and isolation on an unprecedented scale" against Iran and threatening "tremendous economic consequences" for any country providing a lifeline to Tehran [1][2][9]. The announcement followed the expiration of a 60-day ceasefire window and came as the United Arab Emirates suspended all trade and financial dealings with Iran after accusing Tehran of firing ballistic missiles toward its territory [5][24][35]. Iran's military simultaneously warned Gulf Arab states that any assistance to US forces would be treated as direct participation in the war [15][18][35].
Trump framed the campaign as an "Economic D-Day" and demanded an immediate halt to oil smuggling, currency swap lines, cash transfers, exchange houses, ship registrations, and front companies [9][10][13]. He asserted that Iran's navy is destroyed, its currency is worthless, and the country is "hanging by a thread" [13][16]. Treasury Secretary Scott Bessent described a two-pronged strategy combining economic isolation with the naval blockade [5][9]. Trump stated that no talks with Iran are being held or scheduled and that the blockade remains in full force [8][10][25]. White House spokesperson Anna Kelly said Trump will prevent Iran from possessing a nuclear weapon [4].
The UAE's suspension followed its Defense Ministry's statement that two ballistic missiles were launched from Iran, with one landing inside UAE territorial waters [24][35]. UAE Foreign Ministry Communications Director Afra Al Hameli announced that "all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice" [24][35]. Retired US General Mark Kimmitt described the UAE embargo as potentially more significant than US sanctions because it cuts off Iran's primary route for moving money and goods [36]. Dubai has served as Iran's most critical trading partner and sanctions-evasion conduit [36].
Iran categorically rejected the missile accusations. Foreign Ministry spokesman Esmail Baghaei called the claims baseless and "detrimental to ongoing efforts to strengthen trust among the countries of the region" [24][31][35]. He called on regional parties to refrain from baseless accusations, citing what he described as "the malicious practices of America and Israel" and "numerous disinformation operations" in the region [31]. Some Iranian framings suggested the missile accusation could be a US-Israeli false-flag pretext for economic strangulation [36].
Iranian officials projected defiance. Parliament Speaker Mohammad Bagher Qalibaf stated "I can state with conviction that we have won this war in the true sense of the word, both militarily and politically" [7]. Deputy Foreign Minister Kazem Gharibabadi responded to Trump's social media post labeling the Strait of Hormuz as "NEW U.S. Territory" by vowing to "correct the delusions of this deluded man," while an official Iranian social media account posted a map of the United States with California labeled "Iran's new territory" [33][24]. Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, said "Welcome to the post-American order in the Persian Gulf" [35].
Iran's military issued explicit warnings to Gulf states hosting US bases. Chief of Staff Ali Abdollahi stated that "any assistance or facilitation provided to the aggressor US military amounts to participation in the US military operation" and that Iran is "fully aware of the situation" [18][22][35]. Unnamed Western and Arab officials reported frustration among Gulf allies, with one unnamed Gulf official stating "Ông Trump khơi mào cuộc chiến và chúng tôi đang phải trả giá" (Trump started the war and the Gulf states are paying the price) [18]. US officials reported that Saudi Arabia, the UAE, Qatar, Kuwait, and Bahrain are dissatisfied, with some considering whether to continue hosting large US military bases [18].
Iran's leadership has shifted to an explicitly offensive military doctrine. Supreme Leader Mojtaba Khamenei called for preparing large-scale offensive operations [7][41]. Former Revolutionary Guards general Hossein Kanani-Moghadam said the strategy could encompass cyber warfare, psychological warfare, intelligence operations, and economic warfare [7]. Analyst Sina Toossi warned that Iran would "escalate earlier and more forcefully rather than wait for the United States or Israel to define the terms of the conflict" [7]. Sources within the Iranian government told the Financial Times that Iran has evaluated attacking US military targets in southeastern Europe, including bases in Bulgaria and Cyprus, if Trump acts on threats to attack Iranian infrastructure [22][29][34]. The IRGC threatened the United Kingdom, stating any base used to attack Iranian territory will be considered a legitimate target [22][29]. A NATO official stated the alliance is ready to address all threats, while RUSI researcher Sidharth Kaushal assessed the Iranian missile threat to Europe as real but limited [29].
China rejected the US secondary sanctions. China's Ministry of Commerce called them "in violation of international law" and stipulated they shall not be complied with [5]. Foreign Ministry spokesperson Lin Jian said China opposes unilateral sanctions lacking international legal basis [40]. Analysts identified China as the decisive enforcement gap, with the US Treasury Department estimating China accounts for 90% of Iranian oil exports through ship-to-ship transfers by a "shadow fleet" and Yuan-based settlements at independent "teapot" refineries [39][40]. Brett Erickson of Obsidian Risk Advisor identified punitive steps against Chinese banks as the most consequential remaining lever [2].
Trump insisted the Strait of Hormuz remains open under the US naval blockade and opposed any fees for vessels transiting the waterway [8][25]. Iran and Oman described their negotiations on safe-navigation mechanisms as proceeding in a "positive and constructive atmosphere" [27][32]. Egypt said the Iran-Oman deal could pave the way for broader US-Iran negotiations [24][27]. Trump threatened to bomb Oman if it "gets in the way" of US objectives [27][32][38]. The Lloyd's Market Association introduced a clause terminating insurance for vessels paying transit fees [43]. Qalibaf insisted the strait will remain closed until the US lifts the blockade and ends oil sanctions [8][35].
Energy and shipping analysts argued Iran retains leverage through its control over the strait. Dimitris Maniatis, CEO of Marisks, asserted Iran "exerts near-full control of the Strait of Hormuz" through the threat of attack [37]. Gregory Brew of Eurasia Group said Iran's leadership "is prepared to absorb a lot more economic pain" [37]. Jorge Leon of Rystad Energy described the standoff as "a matter of who blinks first" [37]. Ordinary Iranians face food inflation above 128%, with President Masoud Pezeshkian acknowledging the blockade has crippled oil revenue [46]. Parliament researcher Hadi Mousavi-Nik stated nearly 26 million Iranians live below the poverty line [47]. Three hundred Iranian civil society activists signed a letter to the UN vowing to defend Iran against foreign aggression [48].
Trump's campaign has strained alliances beyond the Gulf. He reduced joint military exercises with South Korea, whose Foreign Minister Cho Hyun said the move appeared to include pressure to join the Iran war [4][35]. US Vice President JD Vance stated that keeping energy prices low is "goal number one," ranking non-proliferation second [7]. Turkish analyst Bozkurt Aran estimated a 25% US tariff could cost Turkey $4 billion [45]. South Korean researcher Bing Hyeon-ji warned continued blockade could push oil prices toward $150 per barrel [49]. Saudi Aramco leveraged pipelines to capture Kenyan fuel markets from the UAE [42], Iraqi truckers used a reopened Syria land route [44], Houthi rebels claimed drone strikes on a Saudi refinery [24], and a Russian analysis argued the Hormuz standoff pushes China toward Russian pipeline energy [50].
The US naval blockade remains in force with no talks scheduled [8][25]. The UAE trade suspension remains in effect, and Iran's warnings to Gulf states continue [35]. Iran-Oman negotiations on Hormuz navigation proceed despite Trump's threat against Muscat, while maritime insurers have rejected any transit-fee arrangement [27][43].