US weighs new Iran sanctions targeting oil buyers

US officials said the Treasury is reviewing a new sanctions package designed to intensify economic pressure on Iran, including options that could extend beyond US entities to foreign companies.

Officials said the menu under consideration includes secondary sanctions that could target customers buying Iranian oil, as well as financial intermediaries involved in transferring payments linked to those transactions.

Secondary sanctions option focuses on foreign crude purchases

According to officials, one approach being examined would center on overseas purchases of Iranian crude. They said the objective would be to narrow revenue channels connected to oil sales, which they described as a core source of hard-currency income for Iran.

Officials said the administration is weighing how restrictions on major buyers could influence global supply and prices. They added that the market response was still developing and that the full effect on prices and trade flows had not yet taken shape.

China and diplomatic considerations

Officials pointed to data indicating that China’s crude imports represent a material share of global flows, and said that backdrop is part of the assessment. They also said that pressuring large buyers carries diplomatic risk, particularly with China, which they described as purchasing sizable volumes of Middle East crude.

Officials did not name possible targets and did not describe any thresholds that could determine which entities might be designated in a future step.

Payment routes and exchange houses also under review

Beyond oil customers, officials said the Treasury is considering measures aimed at exchange houses that move funds through the Gulf. They described those channels as financial pathways that can support cross-border settlement tied to Iran-connected trade.

Officials said secondary sanctions could also be applied to trading partners that handle Iran’s funds, including firms in Turkey and the United Arab Emirates. They did not provide a list of firms and did not specify which activities would be treated as sanctionable under the approach being weighed.

Carve-outs, exemptions, and enforcement trade-offs Officials said the administration is evaluating carve-outs and exemptions intended to reduce spillovers and limit disruption to allied trade while seeking to close what they called loopholes. They described the central design challenge as tightening enforcement without unnecessarily pulling legitimate commerce involving partners into the measures.

Decision timeline and remaining uncertainty

Officials said a final decision could come by August 31, 2026. They added that implementation may be phased, giving trading partners time to adjust and allowing the Treasury to calibrate exemptions.

Officials said no option has been selected and emphasized that details remain under review. They said the scope and timing of any measures will remain uncertain until the administration makes a final call, with market reaction still unfolding.