Iran War Enters a New Phase:

Economic Warfare, Hormuz and the Battle for Iran’s Financial Lifelines

By AI TV INFO | Global Intelligence & Security Unit

The war involving the United States, Israel and Iran is entering a fundamentally different phase.

After months of direct military confrontation, the center of gravity is shifting toward economic warfare, maritime pressure, sanctions, regional diplomacy and the struggle over Iran’s ability to move money and export energy.

The military front has not disappeared. But increasingly, Washington and Tehran are testing whether economic pressure can achieve what battlefield operations have failed to accomplish: forcing the other side to accept a political settlement.

The conflict began with the U.S.-Israeli offensive in February, which killed Supreme Leader Ali Khamenei and struck Iranian nuclear and military infrastructure. A subsequent ceasefire and June memorandum reduced the intensity of the fighting, but the underlying disputes—including Iran’s nuclear program, sanctions and the Strait of Hormuz—remain unresolved.

Now, the economic battlefield is becoming the decisive arena.

Washington Turns to “Maximum Economic Pressure”

The Trump administration is preparing another major escalation in sanctions.

U.S. Treasury Secretary Scott Bessent has described the forthcoming measures as the “toughest sanctions in history.” Washington says the objective is to cut Iran’s access to foreign currency, reduce oil revenues and constrain Tehran’s ability to finance its military and regional partners. Further measures are expected to be announced on August 24.

The United States has also increasingly targeted the financial networks that Iran uses to operate outside the conventional international banking system.

On August 7, the U.S. Treasury announced sanctions against networks it said were moving hundreds of millions of dollars for the Iranian regime through clandestine currency and banking arrangements.

This is important because the sanctions battle is no longer simply about blocking Iranian banks.

It is increasingly about finding and shutting down the intermediaries—exchange houses, front companies, shipping networks, informal financial channels and third-country businesses—that allow Iranian money and commodities to continue circulating.

Hormuz Becomes the Strategic Chokepoint

The Strait of Hormuz remains at the heart of the confrontation.

The waterway normally carries a huge share of the world’s oil and gas shipments. Its disruption has already transformed the conflict from a regional military crisis into a global economic problem.

Reuters reported Friday that tanker traffic remains severely impaired and that Iranian oil exports have fallen dramatically. Brent crude was trading around $93 a barrel, with prices up more than 5% for the week.

For Tehran, Hormuz is one of its most powerful remaining strategic levers.

For Washington and its regional partners, restoring predictable maritime traffic is a fundamental objective.

That creates a dangerous equation:

Iran wants leverage over the waterway.
The United States wants freedom of navigation.
Global markets want both sides to stop disrupting shipping.

Diplomatic efforts involving Oman have sought to establish arrangements for safer navigation. But an agreement on a navigation mechanism does not necessarily mean that Hormuz will return immediately to normal.

Iran has linked a full reopening to broader U.S. concessions, including sanctions relief and compensation for wartime damage.

Iran’s Financial Counterattack

Tehran is not simply waiting for sanctions to take effect.

Iran is attempting to strengthen alternative commercial and financial channels that reduce its dependence on the U.S.-dominated financial system.

One of the most important partners is Iraq.

Iranian Central Bank Governor Abdolnasser Hemmati recently held talks with Iraqi officials on banking cooperation and mechanisms for accessing Iranian foreign-exchange resources held in Iraq. The discussions also addressed easier procedures for Iranian traders and exporters.

Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf has simultaneously promoted greater economic cooperation with Iraq and the use of national currencies in bilateral trade rather than the U.S. dollar.

The strategic objective is straightforward:

If dollars and conventional international banks become inaccessible, Iran wants trade to continue through local currencies, alternative payment arrangements and regional commercial networks.

This does not eliminate the impact of sanctions. But it can make sanctions more difficult and expensive to enforce.

Iraq: Iran’s Immediate Economic Hinterland

Iraq occupies a unique position.

The two countries have extensive energy, commercial and religious ties, while their geographical proximity makes cross-border trade difficult to eliminate completely.

For Tehran, Iraq can function as a crucial outlet for commerce and financial settlement.

For Washington, however, Iraqi financial institutions and companies dealing with Iran are increasingly exposed to sanctions and compliance pressure.

That creates a balancing act for Baghdad.

Iraq wants access to Iranian energy and continued economic relations with its neighbor, while simultaneously needing access to the international dollar-based financial system.

The result is a growing contest over how much Iranian trade Iraq can facilitate without exposing Iraqi banks and businesses to American penalties.

Recent Iranian-Iraqi discussions demonstrate that Tehran is trying to push this relationship further, including efforts to overcome banking barriers and gain greater access to funds held in Iraqi institutions.

Oman: The Diplomatic and Maritime Bridge

Oman’s role is different.

Muscat has historically maintained relationships with both Washington and Tehran, making it one of the few regional actors capable of communicating with both sides.

That makes Oman particularly important in the Hormuz crisis.

Iran and Oman have been discussing arrangements for safe passage through the strait, including a possible temporary navigation route. Iranian officials have emphasized, however, that such arrangements should not automatically be interpreted as a permanent reopening of Hormuz.

Oman’s importance therefore extends beyond shipping.

It could become a channel through which the United States and Iran test whether a broader diplomatic settlement remains possible.

The UAE Joins the Pressure Campaign

Another major development is the changing position of the United Arab Emirates.

The UAE announced on August 18 that it would halt trade and financial transactions with Iran after accusing Tehran of missile attacks intended to disrupt maritime navigation. Iran denied responsibility for the attacks.

The significance goes beyond the UAE-Iran relationship.

Dubai has historically been one of the most important commercial gateways for Iranian businesses. Greater scrutiny of that channel potentially increases the cost of doing business with Iran and makes Tehran more dependent on alternative routes.

The regional economic map is therefore changing.

Iraq remains an important economic partner.
Oman is a diplomatic and maritime intermediary.
The UAE is moving toward greater economic pressure on Tehran.
China remains Iran’s critical external oil market.

China Becomes the Biggest Economic Variable

No country may matter more to Iran’s economic survival than China.

Reuters reported Friday that Iranian oil offers to Chinese buyers have fallen sharply as the U.S. blockade disrupts Iranian exports. Iran’s shipments reportedly fell to approximately 534,000 barrels per day in August, compared with an average of about 1.4 million barrels per day in 2025.

China has rejected unilateral U.S. sanctions, but Chinese companies still have to calculate the risks of becoming targets of American secondary sanctions.

That leaves Beijing facing a strategic choice.

It can continue purchasing Iranian oil and accept increased confrontation with Washington, or reduce its exposure and contribute to the economic pressure on Tehran.

For Iran, the difference could be enormous.

If Chinese demand remains strong, Tehran retains an important source of foreign revenue.

If Chinese purchases fall substantially, Iran’s ability to finance imports, support the currency and maintain government spending becomes significantly more difficult.

The Shadow Banking Battle

The next stage of the conflict may therefore be fought through financial networks rather than fighter aircraft.

Iran has spent years developing informal mechanisms to move money outside conventional banking channels.

The United States is now attempting to dismantle those mechanisms systematically.

Treasury has targeted Iranian exchange houses, front companies and financial facilitators accused of helping sanctioned entities move money. In July, Washington also targeted exchange houses that it said were moving billions of dollars annually for sanctioned Iranian banks.

This creates a technological and financial cat-and-mouse game.

Iran develops alternative channels.

Washington identifies them.

Iran shifts transactions to another intermediary.

Washington imposes secondary sanctions.

The process repeats.

The question is whether Tehran can maintain enough liquidity to keep its economy functioning while simultaneously financing its military establishment and regional partners.

What Happens Next?

Three broad scenarios now appear most plausible.

1. A Negotiated Off-Ramp

The first possibility is renewed diplomacy.

The economic pressure is becoming increasingly painful for Iran, while Washington also faces the costs of prolonged disruption to global energy markets.

A future agreement could combine:

• restrictions and international verification of Iran’s nuclear activities;
• a controlled reopening of the Strait of Hormuz;
• phased sanctions relief;
• restrictions on attacks against U.S. and regional targets;
• and some form of reduction in U.S. military pressure.

The obstacle is trust.

Both Washington and Tehran believe that additional pressure could improve their negotiating positions.

That makes compromise possible—but difficult.

2. A Long Economic Stalemate

The second scenario may be the most realistic in the short term.

The United States could continue sanctions and maritime pressure without launching another full-scale offensive.

Iran, meanwhile, could continue using regional trade corridors, alternative financial mechanisms and pressure around Hormuz.

The result would be a conflict that is technically less kinetic but potentially more economically destructive.

Iranian families are already experiencing severe inflation, currency depreciation and declining purchasing power. AP reports that inflation could approach 70% while the economy contracts by more than 5%.

Economic warfare therefore carries consequences far beyond governments and financial institutions.

It reaches directly into households.

3. A New Military Escalation

The most dangerous scenario is a renewed cycle of direct military strikes.

Several developments could trigger it:

• an attack on an American warship;
• a major tanker incident;
• an attack on Gulf energy infrastructure;
• an Iranian strike against Saudi or Emirati targets;
• attacks against Iranian nuclear facilities;
• or an attempt to forcefully reopen Hormuz.

The danger is that economic warfare and military warfare are now interconnected.

A financial squeeze can provoke retaliation.

Retaliation can trigger new sanctions.

New sanctions can produce additional pressure on Hormuz.

And disruption of Hormuz can produce another military response.

This is the escalation loop that policymakers in Washington, Tehran and Gulf capitals are trying to prevent.

AI TV INFO’s ANALYSIS

The central question is no longer simply whether Iran can survive another military campaign.

It is whether Iran can survive economic isolation while maintaining control of its strategic assets and negotiating leverage.

Washington is betting that financial pressure will eventually force Tehran to compromise.

Tehran is betting that it can survive the pressure long enough for the political and economic costs of the conflict to become unacceptable to Washington and its allies.

China is the critical external variable.

Iraq is the most important neighboring economic corridor.

Oman is the most important diplomatic bridge.

And the Strait of Hormuz remains the principal physical chokepoint.

The emerging battlefield can therefore be summarized in one chain:

Sanctions → financial isolation → oil exports → China → regional trade corridors → Hormuz → diplomacy.

The United States is trying to close Iran’s financial escape routes.

Iran is trying to build new ones.

And the longer the confrontation continues, the more the Middle East becomes divided between countries trying to enforce the economic pressure and countries trying to keep regional commerce alive.

AI TV INFO’s Forecast

Over the next 2–6 weeks, the most likely outcome is not a decisive military victory but an increasingly intense struggle between economic coercion and Iranian adaptation.

The immediate indicators to watch are:

1. The U.S. sanctions package expected August 24.
2. China’s response to secondary sanctions.
3. Whether Iran and Oman establish a durable Hormuz navigation mechanism.
4. Whether Iraq can expand financial cooperation with Tehran without triggering stronger U.S. action.
5. Iranian oil exports and the price of Brent crude.
6. Any attack on Gulf shipping or U.S. military forces.

If these pressure points remain contained, diplomacy could eventually reopen.

If one of them breaks, the economic war could rapidly become another military escalation.

For now, the conflict is no longer being decided only by missiles and aircraft.

It is being fought through banks, oil tankers, currencies, ports, sanctions, shipping lanes and diplomatic corridors.

And in this new phase of the Iran war, the country that controls the financial and logistical routes may ultimately possess as much leverage as the country that controls the battlefield.

AI TV INFO — Special Report

Editorial Note:

AI TV INFO | Global Intelligence & Security Unit — Reporting and analysis on the latest developments in the Middle East and global security.

AI TV INFO follows international journalism standards by distinguishing verified facts from official claims. Government and military sources may present information from their own operational perspective.We do not advocate for any government, political party, or ideology. Our objective is to present verifiable data, and documented events as accurately and transparently as possible.