Iranian rial hits record low amid US economic crackdown
Developing story first seen 2 hours ago
Iran's currency crisis has deepened as US Treasury Secretary Scott Bessent confirmed the launch of what he called an "economic D-Day" against Tehran, describing it as the "single greatest financial offensive ever marshalled against an adversary." In a Financial Times op-ed published on Sunday, Bessent said President Trump had already driven the rial to record lows and inflation to rare highs, and warned that nations continuing to trade with Iran, including buyers of its petroleum, would face serious consequences, while those cutting ties would gain improved access to global capital markets.
Iran responded defiantly, with security chief Mohsen Rezaei warning that any neighbouring country cooperating with the US crackdown would have its interests targeted, and threatening to block all oil shipments through the Strait of Hormuz if regional states side with Washington. Bessent said Trump would "respond swiftly and decisively" to any Iranian military retaliation, framing the campaign as pressure to force Tehran back to the negotiating table to end the war. Gulf states such as Saudi Arabia and the UAE have developed alternative export routes bypassing the Strait, though Rezaei suggested those routes could also come under threat. A formal announcement of the measures was expected at a press conference on Monday afternoon.
- US Treasury launches "economic D-Day," its toughest financial offensive against Iran
- Bessent threatens nations still trading with or funding Tehran
- Iran's Rezaei threatens Gulf oil routes and neighbouring states in retaliation
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Iran's economy has been under severe strain for years, largely due to US sanctions reimposed after President Trump withdrew from the 2015 nuclear deal in 2018. Those sanctions target Iran's oil exports and access to international banking, and the rial, Iran's currency, has lost most of its value as a result, driving up prices for ordinary Iranians.
The current escalation centres on Scott Bessent, the US Treasury Secretary, who has announced a fresh wave of financial pressure aimed at squeezing Iran's economy further and pushing it back towards nuclear negotiations. Iran has pushed back through officials like Mohsen Rezaei, a senior security figure, who has raised the possibility of disrupting shipping through the Strait of Hormuz, a narrow waterway through which a large share of the world's oil passes.
This matters beyond Iran's borders because the Strait of Hormuz is a critical route for global energy supplies, and any disruption there could affect oil prices worldwide. The standoff also reflects a broader, long-running dispute between Washington and Tehran over Iran's nuclear programme and its influence in the Middle East, with Gulf states such as Saudi Arabia and the UAE caught in the middle as they try to keep their own oil exports flowing.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters of the US campaign argue that intense economic pressure is a legitimate, lower-cost alternative to military confrontation, using financial leverage rather than force to compel Tehran back to serious negotiations over its nuclear and regional activities. They see rewarding nations that cut ties with Iran, through improved access to capital markets, as a sensible incentive structure that isolates a government they view as destabilising, without risking soldiers' lives. From this perspective, a currency collapse and rising inflation are the predictable and justified cost of years of defiance, and firm resolve now may avert a larger conflict later.
The case against
Critics, including those sympathetic to ordinary Iranians rather than the regime itself, argue that such sweeping sanctions chiefly punish civilians through currency collapse, inflation and shortages, while doing little to change the calculations of entrenched decision-makers insulated from economic hardship. They worry that branding the effort an economic D-Day and threatening third countries with consequences amounts to coercive overreach that infringes on other nations' sovereign trade choices, and that framing this in maximalist, triumphalist terms raises the risk of miscalculation, including confrontation over the Strait of Hormuz, rather than genuinely opening a path to diplomacy.
Coverage
- The Guardian — Iran’s rial falls to record low as Scott Bessent warns of ‘economic D-day’ – business live
- Daily Mail — US threatens sweeping financial campaign against Iran and its trading partners
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