The U.S. Donald Trump administration has completely banned paying tolls to Iran for the purpose of passing through the Strait of Hormuz, where passage has been effectively blocked by war. It is raising pressure on Iran, warning strongly that not only Americans but also foreign corporations and individuals could face sanctions.
According to an official announcement by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on the 28th local time, the U.S. government defined as illegal any act of handing over funds to the Iranian government or the Islamic Revolutionary Guard Corps (IRGC) under the pretext of safe passage through the Strait of Hormuz. It specified that not only U.S. financial institutions but also non-U.S. persons could be exposed to strict sanctions risks.
It added that foreign institutions that engage in a transaction linked to a sanctioned party could be sanctioned under Executive Order 13902. This executive order includes freezing the asset of individuals or corporations operating in key sectors of the Iranian economy. The Islamic Revolutionary Guard Corps, which currently holds control over the Strait of Hormuz, is already designated as a terrorist organization by the U.S. State Department. Sending tolls to, or conducting a transaction with, the Revolutionary Guard would naturally lead to expulsion from the international financial network.
In addition, the United States decided to strictly control transactions with China's small private refineries, the so-called teapot refineries, known as the main buyers of Iran's crude oil. China purchases about 90% of Iran's exported crude, and most of the volume flows to these teapot refineries. The Treasury Department also added 35 entities and individuals that managed Iran's shadow financial structure and served as a conduit for terror funding to the sanctions list.
The move is seen as an attempt to cut off Iran's funding and cripple its ability to wage war. Treasury Secretary Scott Bessent said that day, "Iran's shadow financial system serves as a critical financial lifeline for the military while enabling activities that disrupt global trade and foment violence across the Middle East." Bessent added, "Financial institutions should be mindful that they risk paying a severe price if they facilitate or engage with these networks."
President Trump said that day, "Iran has reached its limit." Trump said, "They just informed us that Iran is in a 'state of collapse.'" Experts said that U.S.-led sanctions targeting Iran's economy are having a tangible impact, and that the tense standoff and brinkmanship between the two countries are likely to continue for the time being.