US Treasury to unveil sweeping Iran sanctions as rial hits record low

Iran's rial fell to a fresh record low on Monday as the Trump administration readied what officials described as the toughest sanctions package yet against Tehran. The move comes amid an ongoing US and Israeli military campaign that has now stretched into its sixth month with no clear end in sight.

Trading on informal markets opened with the rial at 2.02 million to the dollar, well below the official central bank rate of around 1.5 million. The drop reflects months of accumulated strain from existing US sanctions, a naval blockade of Iranian ports and the broader effects of the war that began on February 28. Inflation had already been running at double digits and growth was negative before the conflict intensified, but the combination of military strikes and restricted oil exports has accelerated the decline.

US Treasury Secretary Scott Bessent framed the upcoming measures as an "economic D-Day" and the "single greatest financial offensive ever marshalled against an adversary." He warned that any nation continuing to do business with Iran could face secondary sanctions and isolation. The announcement is expected later Monday, building on an existing regime that already targets Iran's banking, energy, aviation and cryptocurrency sectors. President Trump has also threatened penalties against countries whose financial institutions or ports provide any lifeline to Tehran.

Iranian officials have dismissed the threats as economic terrorism and warned of severe retaliation. Security chief Mohsen Rezaei said that if Gulf states join the US effort, not a drop of oil would leave the Persian Gulf and the Strait of Hormuz. Iran has already used attacks and threats to severely limit traffic through the waterway, through which a fifth of the world's traded oil once passed freely. Foreign Minister Abbas Araghchi pointed to America's own mounting debt and interest costs, arguing that further sanctions would only deepen US isolation and the enmity of ordinary Iranians.

The standoff has left the formal 60-day ceasefire window closed without a deal. Both sides have traded accusations of bad faith, with Washington claiming Tehran missed opportunities to negotiate and Tehran insisting it will not yield to pressure. US officials have said the new sanctions aim to sever every remaining economic tie supporting the Iranian government. Iranian leaders have countered that they retain the ability to disrupt regional energy routes if neighboring countries align with Washington.

The human impact of the currency collapse is already visible in higher prices for imported goods and medicines, though Iranian authorities have so far maintained control over daily life and continued to restrict shipping through the Strait of Hormuz. Regional diplomacy involving Oman has produced tentative talks about joint management of the waterway, but those efforts remain fragile and face open US skepticism.

Washington's strategy rests on the assumption that intensified economic pain will eventually force concessions. Tehran has shown no sign of altering its core positions after nearly six months of combined military and financial pressure. The rial's latest slide underscores how the war and sanctions have compounded each other, leaving Iran's economy more isolated while the flow of oil through the Gulf remains heavily constrained.