US threatens Iran with economic isolation 'the world has never seen' over Hormuz blockade

Bessent's warning to Tehran

US Treasury Secretary Scott Bessent warned on Thursday, August 13, that Iran will face economic isolation unlike anything the world has seen, with new measures being prepared for announcement in the coming week. Speaking to Newsmax, Bessent described the American strategy as a combination of two levers: economic asphyxiation and physical blockade. The blockade of the Strait of Hormuz is designed to prevent anything from entering or leaving Iranian ports, in retaliation for Iran's closure of the strait, a waterway of strategic importance for global hydrocarbon trade.

“It will be a combination of economic isolation the world has never seen and the continuation of the blockade at the Strait of Hormuz, which will prevent anything from entering or exiting Iranian ports.”

Bessent presented the approach with comparisons to Cuba and Venezuela, two countries where the United States has previously applied economic blockades. "Venezuela collapsed immediately when we imposed a blockade on it," he said. He framed the new package as measures the world has not seen in the history of economic isolation of a country, without clarifying the specific nature of the measures. He told viewers to stay tuned for additional announcements the following week. The strategy aims to further restrict Tehran's oil revenues and its ability to conduct trade, building on the existing port blockade in the Gulf.

Vance reframes administration priorities

Earlier the same day, Vice President JD Vance told Fox News that the top priority of the United States in the conflict with Iran is keeping fuel costs down for American consumers. He noted that oil prices had fallen and were much lower than the highs reached at the start of the conflict.

“The goal number one is to ensure that oil and gasoline remain cheap for Americans, and goal number two is obviously to ensure that Iran never acquires a nuclear weapon.”

This framing carries particular significance because at the outset of the war, Donald Trump had placed greater emphasis on preventing Iran from acquiring nuclear weapons, even if that entailed short-term economic costs for Americans. Vance's comments reposition the administration's stated priorities, placing affordable fuel first and nuclear non-proliferation second.

Diplomatic deadlock and market sensitivity

The turn toward economic pressure reflects the closure of the diplomatic path. Both sides insist on the terms they have set for reopening the Strait of Hormuz, through which roughly one-fifth of global oil and gas trade passes. The strait remains the central point of the confrontation, and any prolonged disruption of navigation through it is critical for international energy markets.

On August 4, Bessent had told CNBC that a deal between Washington and Tehran to open the strait was possible "today or tomorrow." That assessment contributed to a Wall Street rally and a drop in oil prices. Ten days later, the tone has shifted from optimism about an imminent agreement to threats of economic coercion on a scale Bessent compared to the blockades of Cuba and Venezuela. The diplomatic route appears closed, with both sides holding to their stated conditions for reopening the strait, and no clarification on what the new package will contain.