On Monday, August 24th, the United States announced the initiation of an “Economic D-Day” operation, attempting to further isolate Iran and cut off its external trade and financial channels.
The US Treasury Secretary Scott Bessent warned that countries and entities continuing business with Iran may be excluded from the US dollar financial system. However, he has not disclosed specific sanctions targets and implementation timelines.
The core of the operation is to target five key economic sectors supporting Iran’s war efforts, including digital assets, technology, gold, aviation, and shipping.
The US threats may concern Iran’s five major trading partners. China is the primary destination for Iran’s oil exports, the UAE is a crucial trans-shipment and financial hub, Turkey and Iraq rely on Iranian energy, and India could also be affected by sanctions.
According to US government statistics, China is the largest buyer of Iranian oil and a critical link for Iran’s integration into the global economy, purchasing around 90% of Iran’s oil exports.
According to the US-China Economic and Security Review Commission (USCC), the bilateral trade between China and Iran in 2025 reached $9.96 billion, not including the approximately $31.2 billion worth of undeclared smuggled crude oil Iran exported to China that same year.
Reuters reported, quoting sources from refineries and traders, that Iranian oil transported to China has historically been labeled as Malaysian oil, and more recently as Indonesian oil, settling in Chinese yuan. These transactions involve multiple layers of difficult-to-trace intermediaries, forming a complex sanctions-evading network.
In 2026, the US Treasury Department sanctioned several Chinese refineries for their Iran oil procurement, but has not taken action against Chinese financial institutions involved in the transactions.
Beijing has publicly opposed US sanctions against Iran, urging the resolution of issues through diplomacy and political means. In the same year in May, the Chinese Communist Party directed domestic companies to disregard US sanctions against five refineries involved in Iranian oil trading.
Wang Dan, the China Region Director of the Eurasia Group, stated that Beijing is unlikely to directly retaliate against US sanctions but is more likely to discreetly strengthen compliance measures of state-owned banks and oil companies to avoid being implicated.
“The official statements of the CCP are contradictory to their actual operations,” she expressed, “as authorities are more concerned about obtaining USD financing and accessing the US market.”
The UAE, situated on the southern coast of the Persian Gulf facing Iran, has long been a vital trade and financial hub for Iran.
According to World Trade Organization (WTO) data, the bilateral trade between the UAE and Iran in 2024 was approximately $21 billion, comprising over 30% of Iran’s total imports. The UAE is also Iran’s third-largest export destination, with exports exceeding $7 billion, accounting for 13% of Iran’s total exports. UAE Economic Department data shows that non-oil trade between the two countries in 2024 totaled around $6.6 billion, with the majority being re-exported trade.
However, the relations between the two countries hit a deadlock last week. On August 19th, Iran launched two ballistic missiles into UAE airspace, with one targeting a UAE-owned oil tanker, prompting the UAE to suspend all trade and financial transactions with Iran.
Cutting off Iran’s connections with the US requires significant cooperation from UAE authorities to take stronger measures against opaque financial and trade activities. According to a report by the Washington Institute, Iran has relied on UAE banks and financial systems to enter the global economy through illicit and often opaque transactions.
Former US Treasury official Matthew Levitt stated in a report on Monday that, “Iran’s vast transshipment, smuggling, and shadow bank activities mainly occur in Dubai, so the US must make every effort to assist Abu Dhabi’s UAE national leaders in persuading and convincing Dubai leaders to cooperate.”
The UAE is a federation comprising seven emirates, with Dubai being one of the emirates, and Abu Dhabi serving as the capital and another emirate.
Turkey maintains significant commercial ties with Iran. Turkey imports natural gas from Iran and exports machinery and components, chemicals, agricultural products, and other manufactured goods to Iran.
According to the Turkish Ministry of Foreign Affairs, the bilateral trade between Turkey and Iran in 2024 reached $5.7 billion.
Local media reports indicated that a 25-year natural gas supply contract between the two countries expired at the end of July. In the first half of this year, the quantity of natural gas imported from Iran to Turkey significantly increased, accounting for about 18.6% of Turkey’s natural gas imports.
Turkey has been seeking energy supply diversification, expanding imports through pipelines from Azerbaijan and Russia. However, Turkey has not expressed intentions to cut off its natural gas supply from Iran thus far.
Iraq relies on Iran for electricity and natural gas to compensate for domestic power shortages. Historically, the trade volume between Iraq and Iran has reached billions of dollars.
In March 2024, Iran renewed a five-year contract to annually supply nearly 66 billion cubic feet of natural gas to Iraq. Additionally, according to the US Energy Information Administration (EIA), in 2023, Iraq’s electricity imports from Iran accounted for over 30% of its total electricity generation.
The trade volume between Iraq and Iran exceeded $10 billion in 2025. Moreover, Iraq pays approximately $4-5 billion to Iran annually for natural gas, used for power generation.
However, due to increased security risks in the region and frequent border closures since the eruption of the Iran conflict at the end of February, this year’s trade volume has declined.
The new US sanctions may reduce the energy payments Iraq makes to Iran.
India is Iran’s fifth-largest trading partner, but bilateral trade between the two countries has been declining in recent years. According to the Indian Ministry of Commerce statistics, in the 12 months leading up to March 2026, bilateral trade between India and Iran was approximately $1.6 billion, lower than the $2.3 billion recorded until 2023.
India primarily exports rice, tea, sugar, and pharmaceuticals to Iran, while importing dried fruits and fresh fruits from Iran. Unlike China, India is not the largest pillar of Iran’s oil trade; however, Indian companies could still face threats from US sanctions concerning energy procurement, shipping, and financial settlements.
In April of this year, after the temporary lifting of US sanctions on Iranian crude oil exports, India resumed importing crude oil from Iran after a seven-year interruption.
But if the US acts on its sanction threats, entities involved in procuring Iranian energy, including Indian refiners, may face challenges.