Middle East war: Iran vows to retaliate after US extends sanctions

Iran has promised to retaliate against expanded United States sanctions that the Americans said would cut Iran’s economic lifeline, with ​Tehran expressing confidence that major trading partners would resist Washington’s pressure campaign.

U.S. Treasury Secretary Scott Bessent unveiled the measures on Monday, August 24, 2026, but stopped short of the most punishing sanctions, saying ‌countries that continued trading with Iran risked being forced out of the dollar-based financial system.

Bessent declined to identify the countries that would be targeted or reveal when the penalties would take effect, saying he would instead give them time to comply with the new directive.

The Treasury Department did announce new sanctions on 60 individuals, entities and vessels, but the list did not feature any of the Chinese financial institutions suspected of facilitating Iran’s oil trade.

Iran and the United States signed an interim ​deal in June aimed at ending the war that began with U.S. and Israeli attacks on Iran, but the Islamabad memorandum, as it is known, quickly faltered.

Mediator Pakistan made “significant progress” ​in the latest talks with Tehran that focused on measures such as the prevention of further escalation of the conflict and the reopening of the Strait of Hormuz, ⁠the Pakistani military said in a statement on Tuesday.

“The Iranian president candidly shared his government’s perspective and we had a very constructive exchange on the issues involved,” Interior Minister Mohsin Naqvi, who accompanied army chief ​Asim Munir to Tehran, wrote on X.

The White House and the State Department did not immediately respond to requests for comment made outside business hours. Iran has not yet commented on the latest talks with Pakistan.

Before ​news of the latest sanctions, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in retaliation for any U.S. economic measures.

Oil prices drop as US set to unveil new Iran sanctions

After they were unveiled, Iranian Economy Minister Ali Madanizadeh said: “We are fully prepared for the U.S. sanctions.”

“Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know how to play the game. Our defense is no longer so defensive; the enemies should wait ​for an attack,” the minister told state TV.

Madanizadeh added that neither China nor Russia had “accepted” the U.S. measures, predicting that other countries would resist them.

Brigadier General Hossein Mohebbi, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, vowed heavy blows to U.S. ​vital interests and energy chokepoints if Iran’s infrastructure is threatened.