Why America Can’t Strangle Iran

Foreign Affairs | Esfandyar Batmanghelidj

On August 24, 2026, U.S. Treasury Secretary Scott Bessent announced a sweeping economic onslaught targeting Iran’s global financial connections under the White House initiative known as Operation Economic Fury. This campaign aims to sever every economic lifeline sustaining the Iranian regime, representing a major escalation in Washington's efforts to isolate Tehran.

The aggressive measures mirror a previous attempt in April 2026 to impose a financial stranglehold on the country. This recurring strategy closely resembles the May 2018 "maximum pressure" campaign initiated by the first Trump administration. The strategy has repeatedly failed. As author Esfandyar Batmanghelidj highlights, these repetitive American efforts fail to achieve their goals due to the underlying sources of Tehran’s economic resilience. Ultimately, the persistent cycle of announced onslaughts reveals the limits of Washington's capacity to economically strangle the Iranian state, exposing a repetitive pattern of policy rollouts that fail to disrupt Iran's core financial networks.

Comment

Washington’s reliance on Operation Economic Fury to sever Tehran's financial lifelines exposes the structural limits of unilateral financial warfare. The U.S. Department of the Treasury's Office of Foreign Assets Control has increasingly exhausted its primary sanctions mechanisms, leaving few novel targets to exploit. Consequently, the marginal utility of each successive designation diminishes as Iranian financial networks adapt through informal value transfer systems and non-Western clearing mechanisms. This adaptation transforms the Iranian domestic market into a highly insulated, sanctions-resistant autarky that resists Western economic leverage.

A historical parallel exists in the 2012 SWIFT disconnection of Iranian banks, which initially crippled Tehran's oil exports but ultimately accelerated the development of the Central Bank of Iran's alternative financial messaging systems. Rather than forcing capitulation, that historical embargo forced the regime in Tehran to build parallel trade corridors with partners like China. The legacy of the 2012 SWIFT ban demonstrates that prolonged economic isolation merely drives the Central Bank of Iran to permanently bypass Western clearing systems.

Strategic Question for Discussion

If Operation Economic Fury fails to disrupt the Central Bank of Iran's alternative clearing networks, what does this reveal about the future utility of unilateral U.S. financial sanctions as a primary tool of deterrence?

The trajectory indicates that the failure of Operation Economic Fury would signal the end of uncontested U.S. financial hegemony, forcing Washington to rely more heavily on kinetic or cyber options. As the Central Bank of Iran successfully integrates with non-Western financial architectures, other targeted states are highly likely to adopt similar defensive economic models. This shift suggests that unilateral sanctions will increasingly yield diminishing strategic returns against mid-tier regional powers.

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