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US economic chokehold on Iran reaches peak leverage as collapse risks emerge

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US economic chokehold on Iran reaches peak leverage as collapse risks emerge

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U.S. economic pressure on Iran has reached one of its most powerful points in decades, but inconsistent enforcement has prevented sanctions from achieving their full impact, according to a former Treasury sanctions expert.

Miad Maleki, who played a central role in Treasury Department sanctions campaigns against Iran and its network of proxy groups, said in an on-camera interview the current moment reflects a rare convergence of economic, political and diplomatic leverage against Tehran.

“We’ve never had the level of leverage that we have today with Iran in the history of our conflict … since 1979,” Maleki said. 

His assessment comes as President Donald Trump signaled escalating pressure Thursday, writing on Truth Social that the United States has “total control over the Strait of Hormuz” and that it is effectively “sealed up tight” until Iran agrees to a deal.

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Maleki argues the current moment marks a turning point because multiple pressure tools — sanctions, a U.S. naval blockade, and tighter enforcement — are being applied simultaneously for the first time in years. Unlike previous cycles, he said, the strategy is now directly targeting Iran’s oil exports and the networks that help move them, raising the risk of a rapid economic squeeze.

He said Iran may run out of oil storage in as little as two to three weeks, forcing production cuts, while gasoline shortages could hit on a similar timeline due to heavy reliance on imports. Combined with an estimated $435 million in daily economic losses, the pressure could spill into the financial system, leaving the regime struggling to pay salaries and raising the risk of renewed unrest.

An oil tanker is seen near the terminal at Kharg Island, Iran, as U.S. officials and analysts consider whether seizing the island could significantly impact Iran’s oil exports. (Ali Mohammadi/Bloomberg)

Maleki said the real leverage lies in sustained economic pressure and enforcement.

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At the core of that pressure is an Iranian economy he describes as “on the verge of collapse,” driven by years of sanctions and compounded by recent disruptions.

He pointed to triple-digit food inflation, a sharply devalued currency and a roughly 90% collapse in purchasing power, along with potential long-term oil revenue losses of up to $14 billion annually.

Maleki, who is currently a senior fellow at the Foundation for Defense of Democracies, estimated that current conditions are costing Iran “about $435 million a day in combined economic damage … with the blockade and closure of the Strait of Hormuz.”

A key driver of that pressure is the Strait of Hormuz, long viewed as one of Iran’s primary tools of leverage in global energy markets. Maleki said the dynamic has shifted.

IRAN IS ‘TRYING TO GIVE THE GLOBAL ECONOMY A HEART ATTACK’ BY CLOSING STRAIT OF HORMUZ, UAE MINISTER SAYS

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President Donald Trump weighs a potential attack on Iran’s oil hub at Kharg Island amid expert predictions of market chaos. (Morteza Nikoubazl/NurPhoto)

“Iran’s economy relies on the Strait of Hormuz more than any other economy,” he said, calling its closure a form of “economic self-sabotage.”

While countries in Asia — including Japan, South Korea, India and China — are most exposed to disruptions, many have built up reserves. “Japan’s oil reserve is pretty significant. Same with China,” Maleki said.

Still, the region remains heavily dependent on the waterway, with roughly 75% of liquefied natural gas supplies for countries including India, China and South Korea flowing through the strait.

Inside Iran, however, vulnerabilities are more immediate. Despite vast oil reserves, the country imports between 30 million to 60 million liters of gasoline per day to cover a domestic shortfall of up to 35 million liters.

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“If they run out of gasoline… they’re going to have a major crisis domestically,” Maleki said, noting that past shortages and price hikes have triggered widespread protests.

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The economic pressure is being reinforced by a U.S. naval blockade targeting Iran’s oil exports, the regime’s primary source of revenue.

A billboard showing a portrait of the late Iranian Supreme Leader Ayatollah Ali Khamenei, who was killed in U.S.-Israeli strikes, looms over an empty square in Tehran, Iran, Thursday, March 5, 2026. (Vahid Salemi/AP Photo)

A senior administration official said the Treasury Department is intensifying enforcement under what it describes as an “Economic Fury” campaign, using financial and maritime tools in tandem to squeeze Iran’s revenue streams.

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The official said the strategy focuses on “systematically degrading Iran’s ability to generate, move, and repatriate funds,” including by constraining maritime trade through the naval blockade, which targets Iran’s primary source of revenue from oil exports.

Financial pressure is also expanding globally. The official said Treasury has warned banks in China, Hong Kong, the United Arab Emirates and Oman that facilitating Iranian trade could expose them to secondary sanctions, signaling a more aggressive approach to enforcement beyond Iran’s borders.

Treasury has issued sanctions on more than 1,000 targets since 2025 under the current maximum pressure campaign, the official said, aimed at disrupting Iran’s oil trade and financial networks.

The official added that Iran is facing immediate logistical constraints, warning that storage capacity at Kharg Island — the country’s main oil export terminal — could be filled within days if exports remain blocked, potentially forcing production shut-ins.

“Treasury will continue to freeze the funds stolen by the corrupt leadership on behalf of the people of Iran,” the official warned.

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A new analysis from United Against Nuclear Iran said the blockade is already deterring high-value shipments, even as some Iran-linked vessels continue to transit the region.

TRUMP CLAIMS IRAN ‘STARVING FOR CASH,’ ‘COLLAPSING FINANCIALLY’ AFTER EXTENDING CEASEFIRE

Iran seized two oil tankers Thursday while former Iranian minister Ezzatollah Zarghami threatened to make the Strait of Hormuz a “massacre and hell” for U.S. forces. (Giuseppe Cacace/AFP)

“Effectiveness should not be measured by the total number of Iran-linked vessels at sea,” the group said in an April 22 statement. “But by whether the U.S. is disrupting high-value Iranian oil exports… and deterring large-scale illicit shipments.”

At least 29 vessels have been turned around or forced back to port, including several very large crude carriers, according to the report.

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The blockade, announced April 12 and enforced by U.S. Central Command, is designed to cut off Iranian crude exports, particularly shipments to China, while prioritizing high-impact targets.

While sanctions are clearly biting, Maleki said their impact has been limited by inconsistent enforcement across successive U.S. administrations.

U.S. sanctions on Iran have been in place in various forms for years, targeting the country’s oil exports, banking sector and access to global financial systems.

Under the Obama administration, sanctions pressure was partially lifted under the nuclear deal. The first Trump administration reimposed “maximum pressure,” but enforcement ramped up gradually and lasted only a limited period. The Biden administration later eased enforcement in pursuit of diplomacy.

He argued that cycles of tightening and relief — including sanctions rollback under the Iran nuclear deal and pauses in enforcement — have allowed Tehran to adapt.

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“What’s different now,” Maleki said, is the combination of sustained sanctions with real-time enforcement measures that directly restrict Iran’s ability to export oil — a step that was largely absent in earlier phases.

To maximize pressure, Maleki said Washington must sustain enforcement, particularly through secondary sanctions targeting foreign banks and companies facilitating Iranian trade.

Crucially, he downplayed the likelihood that outside powers could offset the pressure.

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Anti-regime protests engulf the streets of Tehran, Iran, on Jan. 6, 2025. (Reuters)

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“I can’t really point to any other nation… that is going to jump in and give the Iranian regime a lifeline,” he said.

“At some point in the next few weeks to a few months, they’re going to face not just gasoline shortages and oil production disruptions, but also a major banking problem to pay salaries of government employees and IRGC personnel,” he said. “Iranians run out of patience again, as they did before, and they’re back on the street. I’m not quite sure if you’re going to have unpaid IRGC forces willing to go back on the street and kill their fellow Iranians who have the same grievances that they have now, which is a collapsed economy.”

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Trump Says Iran Has Agreed to Not Have a Nuclear Weapon

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Trump Says Iran Has Agreed to Not Have a Nuclear Weapon
June 3 (Reuters) – ⁠U.S. ⁠President ⁠Donald Trump said on Wednesday ‌that Iran ‌has ⁠agreed ⁠to not have a nuclear weapon and that Iran’s Ayatollah ⁠is involved ⁠in ⁠negotiations with the United States. “They’ve already agreed ⁠they’re not ⁠going to have a nuclear weapon,” ⁠Trump told a podcast …
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Trump expands Cuba sanctions beyond US companies in major crackdown on foreign enablers

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Trump expands Cuba sanctions beyond US companies in major crackdown on foreign enablers

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The Trump administration is rolling out what experts describe as the most significant expansion of U.S. sanctions on Cuba in decades.

The administration is attempting what supporters say is the first broad application of Cuba-related secondary sanctions against foreign firms, aiming not only at Havana itself but also at foreign companies and banks that continue doing business with the island’s military-linked economic empire. 

The new framework, established under an executive order signed by President Donald Trump May 1, applies pressure beyond U.S. companies for the first time, threatening foreign firms with sanctions exposure if they continue operating in key sectors of the Cuban economy linked to Grupo de Administración Empresarial S.A., or GAESA.

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Supporters say the move closes a loophole that allowed foreign investors to sustain Cuba’s communist regime while the longstanding U.S. embargo largely restricted Americans.

Critics argue the measures risk worsening an already severe humanitarian crisis on the island without meaningfully weakening the government.

Demonstrators attempt to burn the Communist Party headquarters in Morón, Cuba, after authorities allegedly opened fire on protesters without warning. (Obtained by Fox News Digital)

“At the top of the month, what the Trump administration did was for the first time extend the application of U.S. sanctions from just prohibiting trade between U.S. firms and U.S. persons and the Cuban island to third-party countries and enablers,” Max Meizlish, a former Treasury Department official now serving as a research fellow at the Foundation for Defense of Democracies, told Fox News Digital in an interview.

“For the first time ever in a truly unprecedented fashion, that’s the same logic that the administration is now applying to Cuba,” he said.

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The sanctions focus heavily on GAESA, a sprawling military-linked conglomerate that analysts estimate controls between 40% and 70% of Cuba’s economy, including tourism, mining, retail, ports and financial services. 

A recent Foundation for Defense of Democracies report authored by Meizlish and Connor Pfeiffer argued that foreign companies doing business in Cuba are effectively helping sustain the regime’s military and political leadership.

TRUMP DECLARES NATIONAL EMERGENCY OVER CUBA, THREATENS TARIFFS ON NATIONS THAT SUPPLY OIL TO COMMUNIST REGIME

An image of Fidel and Raul Castro and Miguel Diaz-Canel, Cuba’s president and first secretary of the Communist Party, is displayed in a billboard in Havana, April 12, 2023. (Alexandre Meneghini/Reuters)

The State Department sanctioned GAESA and several affiliated entities in May under the new authorities, opening the door for potential penalties against foreign companies and financial institutions that continue dealings with them after a June 5 wind-down deadline.

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Meizlish argued previous sanctions regimes failed because they isolated American companies while allowing foreign actors to continue financing the Cuban state.

“There’s a lot of Spanish firms, for instance, that have invested millions of dollars in luxury hotel properties, villa properties in Cuba that partner with GAESA, all funding this military enterprise at the expense of the Cuban people,” he said.

He also pointed to Canadian involvement in Cuba’s nickel and cobalt sectors, saying foreign investment has generated “huge amounts of money for the regime.”

“A lot of people think about the U.S. embargo over the years is actually being responsible for a lot of the problems on the Cuban island, but they don’t give consideration to the fact that GAESA, this newly sanctioned entity, has been sitting on an estimated $20 billion in assets and cash over the year while depriving the people of Cuba,” Meizlish told Fox News Digital.

But critics of the policy warn the economic fallout could land the hardest on ordinary Cubans.

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William LeoGrande, a longtime Cuba expert at American University, said the May 1 measures represent a major escalation because they specifically target foreign businesses rather than just Americans and aim to deter foreign companies from doing business with GAESA by threatening sanctions exposure.

LeoGrande acknowledged the measures could deprive the Cuban government of revenue but argued the broader population is likely to suffer most.

CUBA’S ENTIRE ELECTRICAL GRID COLLAPSES, LEAVING WHOLE ISLAND WITHOUT POWER

A woman with her son signals a car on a dark street during a blackout in Bauta municipality, Artemisa province, Cuba, on March 18, 2024. (Yamil Lage/AFP via Getty Images)

“This would potentially deprive the Cuban government of funds, but the impact will fall mainly on ordinary citizens because it means the government has fewer resources to import food, medicine and fuel,” he said.

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The debate comes as Cuba faces its deepest economic and humanitarian crisis in years. 

The World Food Programme says food insecurity is worsening amid fuel shortages, inflation and declining access to imported goods, while U.N. officials have warned that electricity shortages and blackouts are disrupting hospitals, vaccination programs and food distribution networks across the island.

LeoGrande also warned tougher sanctions could contribute to another migration crisis.

NICARAGUA BLOCKS PATHWAY USED BY CUBAN MIGRANTS TO REACH THE US

Protesters take to the streets in Cuba over food and electricity shortages.  (Reuters)

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“Another unintended effect is that by making living conditions in Cuba even more desperate, tougher sanctions could trigger a mass migration like we saw in 1980 or 1994,” LeoGrande said.

On background, a U.S. official rejected arguments that American sanctions are responsible for Cuba’s humanitarian crisis.

“The suffering of the Cuban people is not caused by the U.S. embargo but by the Cuban dictatorship’s failed Communist policies and human rights violations,” the official told Fox News Digital. “The embargo does not prohibit Cuba’s access to world markets or trade with third countries.”

The official added that U.S. law explicitly permits exports of food, medicine and medical equipment to Cuba and accused the regime of hiding “billions in overseas bank accounts instead of investing in electricity, infrastructure and the daily needs of its people.”

The debate mirrors long-standing arguments surrounding U.S. sanctions on countries like Iran and Venezuela, where supporters view economic pressure as a tool to weaken authoritarian governments while critics argue regimes often survive and civilians absorb the economic damage.

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Meizlish argued sanctions should not be judged simply by whether they immediately topple governments.

“The problem isn’t that the embargo went too far,” he said. “It’s that it didn’t go far enough.”

Fox News Digital reached out to the Cuban Embassy in Washington for comment but did not receive a response by the time of publication.

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US House passes Iran war powers resolution in rare moment of Trump backlash

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US House passes Iran war powers resolution in rare moment of Trump backlash

The United States House of Representatives has passed a resolution to rein in President Donald Trump’s powers to attack Iran without congressional authorisation.

Four Republicans joined Democrats to pass the bill in a vote of 215 to 208 on Wednesday in Washington, DC.

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While the resolution is unlikely to become law, it represents a stark rebuke against Trump’s decision to join Israel in attacking Iran on February 28, launching an ongoing conflict that will reach its 100th day on Saturday.

Trump did not seek congressional approval for the war, which he has attempted to label as a “skirmish” or a “short-term excursion”.

The Republican leader’s repeated use of military force abroad has frustrated some leaders in Congress, a body which the Constitution solely imbued with the power to declare war.

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Wednesday’s vote marked the fourth time this year that the House has voted on a war powers resolution to force Trump to seek congressional backing for his military actions against Iran.

It is the first time, however, that the resolution has been successful in the House. Its passage comes after a political manoeuvre that some interpreted as a Republican effort to scuttle the bill.

A divide among Republicans

A vote on the war powers resolution was expected on May 21, the eve of Congress’s Memorial Day recess.

But the vote was cancelled, despite indications that the resolution would succeed with Republican support. House Speaker Mike Johnson, a Republican and close Trump ally, chose to adjourn the chamber early.

The resolution, however, was picked up again after the recess. In Wednesday’s vote, Tom Barrett of Michigan, Warren Davidson of Ohio, Brian Fitzpatrick of Pennsylvania and Thomas Massie of Kentucky splintered away from the Republican establishment to pass the bill.

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Massie, whose re-election bid Trump actively campaigned against, marked the occasion with a message on social media.

“The Iran War Powers Resolution that I cosponsored (opposing the war) just passed the House of Representatives,” Massie wrote. “The People’s House is sending a message: end this war.”

Massie will not be returning to Congress next year. He was defeated last month in his local Republican Party primary by a Trump-backed opponent, Ed Gallrein.

Barrett, whose House seat is vulnerable to a Democratic takeover in November’s midterms, explained his vote by arguing that Trump had exceeded his mandate.

“Congress has the exclusive authority under the Constitution to declare war and authorize the use of force. The War Powers Act of 1973 delegates some of that authority to the president for a limited period of time,” Barrett, an army veteran, wrote.

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“That authority has expired, and my support of this resolution tonight is consistent with my belief that it is time for Congress to decide the scope of the mission and the appropriate limits on the use of force in Iran.”

Democrats call on Senate to act

While Trump’s war on Iran has divided House Republicans, the chamber’s Democrats were unanimous in their backing of the war powers resolution. After the vote, several urged their colleagues in the Senate to swiftly pass the measure.

“We passed an Iran War Powers Resolution in the House to rein in Trump and end his unauthorized, reckless war,” Representative Ayanna Pressley, a progressive from Massachusetts, wrote on social media. “The Senate must immediately follow suit and act to end this war.”

Representative Shontel Brown of Ohio, meanwhile, underscored the constitutional issues raised by Trump’s war, as well as its cost.

“Congress holds the power to declare war—not the executive branch,” she said in a post. “After months of chaos, higher costs, and wasted resources, it is time to end Trump’s costly war in Iran NOW.”

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The war on Iran has been costly for the US, with the Pentagon estimating in May that $29bn had been spent so far.

Some analysts consider this an undercount, though. In April, a public finance expert at Harvard University projected that the price tag could soar to more than $1 trillion.

There are also concerns that the war has cost the US in terms of military preparedness.

The Center for Strategic and International Studies, a US-based research institute, issued a report in April warning that certain critical munitions have run low, with the number used outstripping the number of anticipated replacements.

They include Tomahawk missiles, Terminal High Altitude Area Defense systems (THAADs) and Precision Strike missiles (PrSMs).

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Public backlash growing

US voters broadly disapprove of the US-Israel war against Iran. A poll last month from the Marist Institute for Public Opinion found that 60 percent of US citizens disapprove of Trump’s approach to the war, a jump from 54 percent in March.

The increase was even seen among Republicans. While 15 percent disapproved of Trump’s handling of the war in March, the number has since increased to 22 percent.

Among US citizens overall, 61 percent found that the war had done “more harm than good”.

The growing disapproval reflects, in part, the economic backlash to the war, which has sent prices for fuel and other products like agricultural fertiliser skyrocketing.

The Trump administration has also faced criticism for the unprovoked nature of the February 28 attack, though the president and his allies have argued the war was necessary to prevent Iran from obtaining a nuclear weapon.

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More than 3,400 people have died in Iran during the war. At least 13 US soldiers have also been killed in the conflict, which spilled into nearby countries, with deaths reported across the region.

Wednesday’s House war powers resolution now proceeds to the Senate, which passed a similar bill in May.

But it faces an uphill battle overall, as Trump is likely to veto any attempt to curtail his military powers.

Only a bill passed with a two-thirds majority in both the House and Senate can overcome a presidential veto. So far, neither the Senate’s version, nor the House’s, has breached that threshold.

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