Iran responded with defiance on Monday to a US threat of the "single greatest financial offensive ever", saying it was an admission of military defeat and warning countries against aiding Washington.
US Treasury Secretary Scott Bessent, in a column for the Financial Times, declared that an "economic D-Day" had begun against Tehran on Monday and said any country that continued to enable Iran would become a "global pariah".
He also claimed on X that the US had "dismantled Iran's military capabilities, destroyed nearly 100 percent of its military factories, and buried its nuclear programme".
Iran's deputy foreign minister Kazem Gharibabadi posted on the same site that the US turn to financial warfare proved Bessent's claims false.
"Your narrative doesn't add up," Gharibabadi said, asking why, if Washington had achieved such goals, "there is a need for 'the largest financial invasion in history' and the mobilisation of 'all institutions and powers' of the United States!
"Is this a victory or an admission of America's defeat?"
The US and Israel linked the launch of their war in February to Iran's nuclear programme, but the focus since the early days of fighting has been on the Strait of Hormuz, a vital route for global oil and gas supplies.
Tehran continues to blockade the strait, which it did not restrict before the war, driving up global inflation and heaping domestic pressure on US President Donald Trump ahead of mid-term elections in November.
Oil exports plunge
Bessent was due to set out details of the US plan on Monday, with none released so far, but it is unclear how much more economic pressure Washington can place on Tehran.
A US naval blockade of Iran has seen its oil exports via the Strait of Hormuz fall from two million barrels a day pre-war to just 0.4 million by mid-August, according to maritime tracker Kpler.
Meanwhile, the country has been under crushing international sanctions for decades, with a brief period of easing under a 2015 nuclear deal that Trump later ripped up as part of his "maximum pressure" campaign.
Iran has weathered those efforts and, before the war, continued to export millions of barrels of oil, mostly to China, and evade sanctions through complex international financial networks.
Bessent and Trump have both warned countries against helping Iran, signalling a shift in their focus, with the treasury secretary's FT column dwelling on nations who "appease" and "enable" Iran.
Tehran responded on Monday by warning countries not to cooperate with the US efforts. Foreign ministry spokesman Esmaeil Baqaei said taking part would "definitely have its own consequences".
For ordinary Iranians, the standoff is likely to bring only more economic pain after years of rampant inflation, which in December and January fuelled massive anti-government protests.
Sarah Hassanbeigi, a 32-year-old pharmacist in Tehran, put it simply: "It's really very difficult. I don't think people can really take this much longer."
On Sunday, Iranian President Masoud Pezeshkian admitted that Iran faced "many problems in society".
"We are striving with all our hearts to overcome inflation, livelihood problems, unemployment, and to secure the future of the people, so that they can live with dignity and pride," Pezeshkian said.
Delegation from mediator Pakistan
Last week, the Iranian president, considered a relative moderate, said Tehran should "bring the war to an end now as we are in a position of power and dignity".
That followed Supreme Leader Mojtaba Khamenei appointing hardliners to key security positions.
Hassanbeigi said she wanted peace. "Naturally, negotiations mean that both sides have to compromise. My personal opinion is that Iran should compromise now," she told AFP.
Throughout the war, diplomatic efforts, pushed on by mediators, have sought a negotiated end to the conflict.
On Monday, Pakistan's army chief was expected in Iran. Islamabad was a leading mediator in talks that helped secure an April ceasefire.
Omani Foreign Minister Badr al-Busaidi was also due in Iran on Tuesday, as Muscat and Tehran seek a deal on regulating passage through Hormuz.
