U.S. President Donald Trump put the dollar payment network ahead of bombers as a means to subdue Iran. He said he would sanction every country, bank, and corporations that have a transaction with Iran, signaling the most powerful economic operation ever. Iran, in turn, said it would widen the battlefield beyond the Middle East and mentioned U.S. military bases in Europe, such as in Bulgaria and Cyprus.
On the 19th, local time, President Trump said he would launch an unprecedented "economic war and isolation operation" against Iran. In a post on his social media, Truth Social, he said it would be "the most powerful economic operation ever taken against any country." He then warned, "Any country that throws a lifeline to Iran in any form will pay a heavy economic price."
Existing sanctions targeted corporations over Iranian corporations and crude oil transactions. This warning targets third countries that open channels to Iran. It is a form of secondary sanctions to push all foreign banks and corporations that have a transaction with Iran out of the U.S. market and the dollar payment network. President Trump did not disclose which countries and corporations would face additional tariff or financial sanctions.
Since last month, the United States has again blockaded Iranian ports from the sea, blocking both crude oil exports and the import of goods. U.S. Treasury Secretary Scott Bessent recently described the combination of a maritime blockade and economic sanctions as a "one-two punch" when previewing new restrictions targeting Iran's economy. A U.S. administration official told the Wall Street Journal (WSJ) the same day that "President Trump still has more tools to pull out," adding, "With sanctions and the blockade, Iran's economy is already as good as collapsed."
The United Arab Emirates (UAE) announced on the 18th, a day before Trump's declaration, that it would suspend financial and economic transactions with Iran. The move came right after the U.S. government demanded for weeks that the UAE crack down on funding networks consolidation to the Islamic Revolutionary Guard Corps. U.S. officials assessed that cutting off the flow of money through the UAE would deal a bigger blow to Iran than the maritime blockade.
As of 2024, the UAE supplied $21 billion (about 29.1 trillion won), more than 30% of Iran's imports. By World Trade Organization (WTO) tallies, it surpassed China as Iran's largest import partner. The UAE has engaged in entrepôt trade, sending machinery, electronics, and consumer goods imported from other countries to Iran via Dubai rather than goods it produces itself.
Iranian corporations also set up shell companies in Dubai, UAE, instead of on the mainland to evade Western sanctions and collect crude proceeds. After reviewing U.S. correspondent accounts at American banks in 2024, the U.S. Treasury estimated that $9 billion (about 12.5 trillion won) constituted secret financial transactions by the Iranian side. Of that, about $5.58 billion (about 7.7 trillion won), or 62%, was received by UAE corporations. Most of the aging tankers that carry sanctioned crude, known as the shadow fleet, are owned by UAE corporations or managed by UAE corporations.
Former U.S. sanctions official Max Mairziash identified Dubai as a key hub for illicit financial flows. The Foundation for Defense of Democracies (FDD) researcher told the WSJ on the 19th that "UAE moves to directly block transactions with Iran are fatal." However, experts noted a clear limitation: even if the UAE government blocks official banks and major ports, it would be difficult to monitor the free trade zones of the seven emirates and small vessels.
In response, Iran's military is considering plans to strike U.S. assets in Europe. The Financial Times (FT) reported on the 19th, citing multiple figures connected to the Iranian regime, that a U.S. military base in Bulgaria in southeastern Europe is being discussed as a target for Iranian forces. Bulgaria last month opened its Bezmer Air Base to U.S. aerial refueling aircraft. The Islamic Revolutionary Guard Corps issued a public warning last month that it would regard "all bases used to attack Iranian territory" as a legitimate target. In that vein, Iran's military is known to have put on the table options including striking a British base in Cyprus, which was hit by drones in March, or cutting undersea fiber-optic cables in the Strait of Hormuz.
However, Bulgaria is a member of the North Atlantic Treaty Organization (NATO). If Iran attacks the country's territory, the issue of collective defense under the NATO treaty arises immediately. The NATO treaty calls for consultations under Article 4 when a member is attacked, and applies Article 5, activating the collective defense system, if it is recognized as an armed attack. Under Article 5, when a NATO member is attacked, the remaining members must determine and carry out the form of support they deem necessary. The FT reported that "even within the Iranian regime, there are voices worrying that Iran is overplaying its hand."
Sidharth Kaushal, a researcher at the Royal United Services Institute (RUSI), assessed Iranian missiles aimed at Europe as "real, but limited." He said Iran could fire medium-range ballistic missiles at U.S. assets in southeastern Europe, but added, "At long distances, it is difficult to inflict meaningful damage." Douglas Barrie, a researcher at the International Institute for Strategic Studies (IISS), also told the FT the same day, "Iran may have weapons with a range over 2,000 km, but if missiles fail or are intercepted, what could Iran possibly gain?"