Can the latest round of sanctions by the U.S. change Tehran’s behavior? 

On August 24, Treasury Secretary Scott Bessent stood at a podium and promised what he called an “economic D-Day” against Iran. The plan, formally named Operation Economic Outcast, would target the network of companies, shipping operators, banks, and go-betweens that keep Iranian oil flowing to world markets. Bessent announced sanctions on more than 60 entities across China, Hong Kong, the UAE, Singapore, and Europe, and he warned that any country continuing to do business with Tehran could lose access to the American financial system. 

It was dramatic language. President Trump called it “Economic Warfare and Isolation on an unprecedented scale.” But for anyone who has followed the four-decade history of U.S. sanctions on Iran, the question is obvious: Will this time be different? 

The honest answer, based on the historical evidence, is that sanctions have proven very good at one thing and very bad at another. They have been effective at inflicting serious economic pain on the Iranian state and its people. They have never, on their own, produced the behavioral change Washington wanted. The Trump administration is betting that Operation Economic Outcast – which goes further than any previous sanction regime – will lead to a different outcome. 

What Bessent Actually Announced 

Operation Economic Outcast has two main components. The first is a fresh batch of sanctions on the specific companies and individuals that help Iran move oil, money, and goods through the global system. The 60-plus targets include Chinese and Hong Kong-based procurement firms, shadow fleet vessels, crypto brokers, and gold traders. This is the nuts-and-bolts enforcement work that Treasury does regularly. 

The second component is the threat of secondary sanctions, and this is where the Administration is getting more ambitious. Secondary sanctions do not just punish Iranian entities. They punish anyone who does business with those entities. A Chinese refinery buying Iranian crude, a Turkish bank processing payments, a shipping company in Singapore, all could face being cut off from the U.S. financial system. 

The caveat is that Bessent stopped short of actually imposing those secondary sanctions on the actors who matter most. He named no specific countries and set no public timelines. Notably, he did not sanction any major Chinese banks, even though China buys roughly 90 percent of Iran’s oil exports. He said countries would get a “cure period” to change their behavior, but he would not say how long that period would last. 

“Why would I want to blow up the global financial system?” Bessent said at the press conference when asked about China. 

That question points to the core tension in any serious Iran sanctions regime: the countries America most need to cooperate could be the ones the Administration least want to confront. 

A Pattern That Keeps Repeating 

To understand where Operation Economic Outcast fits, it helps to see the full timeline. 

The United States first imposed sanctions on Iran after the 1979 hostage crisis. Those early measures froze Iranian government assets and restricted trade. Over the following decades, Congress and successive presidents layered on additional restrictions tied to Iran’s support for terrorism, its human rights record, and eventually its nuclear program. 

The most consequential escalation came in 2012, when the Obama administration and the European Union imposed coordinated sanctions targeting Iran’s oil sector and central bank. The effect was immediate and severe. Iran’s crude oil exports dropped from roughly 2.5 million barrels per day in 2011 to about 1.1 million by 2013, a loss of more than half its export capacity. The Iranian rial lost two-thirds of its value. Inflation spiked above 40 percent. 

That economic pressure was a major factor in bringing Iran to the negotiating table, and in 2015 the two sides reached the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal. Sanctions were eased. Iranian exports climbed back above 2 million barrels per day by 2017. 

Then in 2018, the Trump administration withdrew from the JCPOA and reimposed sanctions under its “maximum pressure” campaign. Iranian exports cratered again, falling to just 400,000 barrels per day by 2020, the lowest level in decades. 

And then the pattern reasserted itself. Under the Biden administration, enforcement loosened. Iran developed an elaborate shadow fleet of tankers, set up front companies, and leaned heavily on China as a willing buyer offering discounted prices. By 2024, exports had climbed back to roughly 1.5 million barrels per day. By 2025, they were at 1.6 million, and Iran generated an estimated $64 billion in energy revenue that year. 

Do Sanctions Work? It Depends on What You Mean 

The academic research on sanctions is large and contested, but a few findings hold up across studies. 

The most comprehensive dataset, maintained by the Peterson Institute, analyzed more than 170 sanctions episodes since World War I and found a success rate of roughly 34 percent. A more recent study by the Global Sanctions Data Base put the figure at about 30 percent. Scholars at CEPR found that sanctions imposed after 1990, which tend to be better targeted, succeed at a rate closer to 40 percent. 

The catch is in how you define “success.” Sanctions tend to work when the goal is modest, when the target country is small and economically weak, and when the sanctioning country has substantial trade leverage over the target. They tend to fail when the goal is regime change or a major reversal of national security policy, and when the target has powerful allies willing to absorb the cost of helping it evade pressure. 

Iran checks most of the boxes that predict failure. It is a large, resource-rich country. Its leadership treats resistance to U.S. pressure as an existential and ideological commitment. And it has a willing partner in China, which has both the economic scale and the geopolitical motivation to keep buying Iranian oil at a discount. 

A 2024 book by researchers at Johns Hopkins, “How Sanctions Work: Iran and the Impact of Economic Warfare,” found that decades of sanctions on Iran have largely produced the opposite of their intended effect. Rather than weakening the regime, sanctions consolidated state control over the economy, empowered the Revolutionary Guard’s commercial networks, and pushed ordinary Iranians into greater dependence on the very institutions the sanctions were meant to pressure. Unilateral U.S. sanctions have achieved foreign policy goals in only about 13 percent of cases, according to one study cited in the research. 

The China Problem 

Every serious analysis of Iran sanctions comes back to the same question: What about China? 

China purchases roughly 90 percent of Iran’s crude oil exports. It processes payments through a network of smaller banks and front companies designed to stay just below the threshold of U.S. enforcement. The shadow fleet that carries Iranian crude to Chinese ports numbers in the hundreds of vessels. 

Bessent acknowledged this at the press conference, noting that China gets 50 percent of its energy from the Persian Gulf and agrees that Iran should not have a nuclear weapon. He suggested common ground exists. But he did not sanction any major Chinese financial institution, and for good reason: doing so could trigger retaliation from Beijing at a moment when the two countries are in the middle of delicate trade negotiations and preparing for a Xi Jinping visit to Washington in late September. 

This is the gap between the rhetoric and the reality of Operation Economic Outcast. The sanctions target intermediaries and facilitators. They do not yet touch the principal buyer. As one University of Michigan economist noted, the announcement is “mostly just an announcement that there will be future announcements.” 

What This Means 

None of this means sanctions are useless. They raise the cost of doing business for Iran. They force Tehran to sell oil at steep discounts, sometimes $13 to $20 below the Brent benchmark. They constrain Iran’s access to global capital markets, advanced technology, and legitimate banking channels. These costs are real and they compound over time. 

The question for policymakers is whether the Administration is being realistic about what sanctions can and cannot do. Four decades of evidence suggest that sanctions alone will not stop Iran’s nuclear program, topple its government, or end its support for proxy militias. They can create economic leverage for diplomacy, as they did in the run-up to the 2015 nuclear deal. But that leverage only converts into results when it is paired with a credible diplomatic off-ramp and sustained multilateral cooperation. 

Operation Economic Outcast, as announced, offers neither. There is no diplomatic track. There is no timeline. And the most important partner, China, has not been meaningfully pressured to change its behavior. 

The history here is not ambiguous. When sanctions are treated as a policy unto themselves, as a substitute for strategy rather than a tool within one, they tend to produce economic suffering without political results. When they are paired with clear objectives and real negotiation, they have a better track record.