President Donald Trump has signaled a continued focus on economic pressure as a primary tool against Iran, stating that the regime's own internal failures are deepening the impact of U.S. sanctions. Trump described the U.S. approach as "low-keying it," noting Iran's significant inflation and financial struggles.
"We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money," Trump said in a recent interview. He added that the U.S. naval blockade on the Strait of Hormuz has compounded Iran's financial crisis. This approach comes after weeks where the administration had repeatedly raised the possibility of renewed military action.
The Treasury Department's "Economic Fury" campaign has intensified efforts to target Iran's oil trade, shadow banking networks, weapons procurement, and cryptocurrency holdings. According to Treasury, this campaign has prevented "tens of billions of dollars" in revenue from reaching the Iranian regime and its proxies, and over 100 vessels linked to Iran's shadow fleet have been sanctioned since early 2026.
"Economic Fury has left the regime desperate for cash," a Treasury spokesperson stated. "Iran’s economy is in freefall, inflation has skyrocketed, and as President Trump said on Sunday, the regime’s ability to pay its troops has been decimated."
However, the extent to which Iran's economic crisis is a result of U.S. sanctions versus internal mismanagement and corruption remains a complex question. Decades of Iranian government spending priorities, which have heavily favored the military and the Islamic Revolutionary Guard Corps (IRGC) over public services, are cited as a significant contributing factor. According to data analyzed by a former Treasury Department sanctions official, the military's share of total government spending in Iran rose from 16% in 1993 to 52% by 2006, while education spending fell from 27% to 15% during the same period.
The IRGC also benefits from substantial off-budget commercial and financial resources, including through its economic arm, Khatam al-Anbiya Construction Headquarters. The Treasury Department designated Khatam al-Anbiya in 2007, describing it as an IRGC engineering entity used to generate income.
While the Treasury acknowledges Iran's increasing use of opaque financial channels to evade sanctions, it asserts that these networks are becoming targets of the U.S. campaign. "The regime is increasingly having to invent new ways to try to evade U.S. sanctions through shadow banking networks, including through exploiting crypto," the spokesperson said. "Treasury continues to monitor and aggressively dismantle these networks."
Morad Tahbaz, an Iranian-American conservationist who was imprisoned in Iran, stated that sanctions have inadvertently created a lucrative "franchise" for those controlling the flow of money and goods within Iran. "Money can't flow freely to the Iranian government's treasury because of the sanctions. So what happens, everything is like a black market, gray market, illegal smuggling from the oil to everything else coming in and out," Tahbaz explained. He added that ordinary Iranians bear the brunt of these economic pressures.
Tahbaz suggested that the economic interests vested in these restricted financial channels may complicate efforts to de-escalate the situation, as those profiting have an incentive to preserve the status quo. The Treasury Department maintains authorizations for humanitarian trade, including agricultural products, medicine, and medical devices, and considers additional requests on a case-by-case basis.
An unnamed U.S. official emphasized that economic pressure is part of a broader strategy, reiterating that President Trump seeks to prevent Iran from obtaining nuclear weapons while retaining all options if Iran continues its activities. "The United States is strangling what’s left of Iran’s economy with one of the most successful naval blockades in history – and Iran would be wise to make a deal. Otherwise, they know what will happen."