Kathmandu— The United States has launched “Operation Economic Outcast,” a sweeping economic campaign against Iran, expanding potential secondary sanctions to include digital assets, technology, gold, aviation, and shipping. The move follows six months of military strikes that failed to significantly alter Iran’s policies or capabilities, prompting a shift towards sustained economic pressure. While not enacting a complete trade ban, the US aims to build a mechanism for targeting Tehran's foreign partners, with China emerging as a key point of contention. The initiative also includes a renewed intelligence campaign offering rewards for information on Iranian leaders and a recognition that further military action is becoming unsustainable.

Shifting From Military Action

Following months of American and Israeli strikes against Iran which inflicted damage but failed to achieve strategic goals, Washington has pivoted towards economic warfare. The military campaign cost the Pentagon at least $37.5 billion by July, depleting stockpiles of interceptor missiles and facing low domestic support. The new economic offensive is viewed less as a sign of confidence and more as an acknowledgement that continued military action is unsustainable, requiring time to rebuild weapons stocks and reduce political costs.

China's Role Complicates Pressure Campaign

A significant obstacle to the US strategy is China, which imported approximately 1.38 million barrels of Iranian oil per day in 2025 – over 80% of Iran’s seaborne exports. Despite a recent decline in deliveries attributed to the war and naval blockade rather than compliance with sanctions, Beijing continues to trade with Tehran through independent refineries, yuan settlements, and obscured cargo schemes. Washington is hesitant to sanction China's largest banks due to potential disruptions to US-China negotiations, retaliation, and interference with critical goods supplies.

Iran Adapts and Diversifies Trade

Iran has been proactively preparing for prolonged isolation, diversifying its trade routes and logistics networks. The Goreh-Jask pipeline aims to facilitate oil exports bypassing the Strait of Hormuz, while overland crossings connect Iran with several neighboring countries. Furthermore, Tehran is increasingly utilizing ship-to-ship transfers, disabling tracking systems, and employing intermediary companies to navigate sanctions, supplementing these efforts with digital assets and gold for individual payments and reserve preservation.

Dollar Dominance Faces Challenge

The effectiveness of US secondary sanctions relies on the dollar’s central role in global trade, accounting for 57.13% of disclosed foreign exchange reserves as of early 2026. However, the increasing use of the dollar as a coercive tool is prompting other nations to seek alternatives. Settlements in national currencies, central bank digital currencies, and initiatives like BRICS Pay are gaining traction, driven by a desire for protection from US financial pressure. The more Washington utilizes the power of the dollar, the greater the incentive for other states to develop independent financial infrastructure.

Resilience of Iranian Society

Iran’s long history of sanctions and economic hardship has fostered resilience within its society. Iranians have adapted to inflation, shortages, and instability, while the state has developed mechanisms for resource allocation and reliance on the private sector. While new sanctions may exacerbate existing economic challenges, they are unlikely to trigger an immediate political uprising, potentially strengthening the authorities’ narrative and increasing public dependence on state-controlled systems.

Operation Economic Outcast is expected to result in a prolonged struggle between Washington and Tehran, with the US attempting to raise the cost of Iran's foreign relations while Iran seeks to expand alternative trade routes and exert influence in key strategic areas.

(With inputs from RT)

Originally published on abcnews.com.np.