Trump’s “economic D-Day” against Iran is built around one of Washington’s most powerful weapons: access to the U.S. financial system. The problem is that the deeper Washington pushes into Iran’s remaining trade, the bigger the targets become.
China buys more than 80% of Iran’s seaborne crude. Iraq relies on Iranian gas for as much as 40% of its electricity generation. Turkey imported 4.5 bcm of Iranian gas in the first half of this year, while India still maintains a heavily one-sided trade relationship with Tehran. The UAE, once one of Iran’s most important commercial and financial conduits, has already suspended dealings with Tehran.
The U.S. Treasury can sanction tankers, traders and small Chinese refiners without creating much collateral damage outside the Iranian trade. Going after the major banks financing that commerce is different, however. The same is true of forcing Baghdad to choose between complying with Washington and keeping Iranian gas flowing to Iraqi power stations.
The Trump administration took a cautious approach on Monday. Its first round targeted nearly 60 individuals, companies and vessels and expanded sanctions across shipping, aviation, technology, gold and digital assets, but left China’s major banks untouched.
That leaves the most powerful part of Trump’s threat still hanging over Iran’s trading partners. If the first round fails to cut Iranian commerce sufficiently, Washington can move from sanctioning the networks built to evade U.S. restrictions to targeting the banks and companies that still have substantial business to lose in the United States.
Here are five countries facing some of the hardest choices under Trump’s new economic offensive against Iran.
#1. China No country buys more Iranian oil than China, making Beijing the largest remaining source of hard-currency revenue for Tehran. Chinese imports reached 1.58 million barrels per day earlier this year before the war and U.S. blockade began squeezing those flows, with shipments falling to roughly 534,000 bpd so far in August from 823,000 bpd in July, according to Reuters.
But China has spent years building an oil trade with Iran designed to minimize its exposure to U.S. sanctions. Independent teapot refineries buy much of the crude, tankers use ship-to-ship transfers and other methods to disguise its origin, and transactions are settled in Chinese currency through difficult-to-track intermediaries. Washington has repeatedly targeted pieces of that network, including Chinese refiners, trading companies and vessels involved.
Those sanctions have disrupted individual companies without stopping the trade. Iranian oil flows to China reached 1.58 million bpd as recently as February even after Washington intensified sanctions on Chinese buyers. Major Chinese banks are a much more powerful target because they still depend on dollar clearing and access to the wider international financial system.
Bessent stopped short of sanctioning those banks on Monday, saying the Treasury wanted to give countries time to cut their exposure before the new sanctions are enforced. But he also promised a “major announcement” involving a financial institution by the end of the week. The Treasury has already warned two larger Chinese banks that they could face secondary sanctions if Iranian funds are found moving through their systems, according to Reuters.
Going after a major Chinese bank would carry much higher costs for Washington. Trump and Xi are scheduled to meet in Washington in late September, with both sides trying to preserve the trade agreement struck last November on U.S. tariffs and Chinese rare-earth supplies.
China therefore remains the biggest test of how far Trump is prepared to take “economic D-Day.” Beijing has repeatedly rejected unilateral U.S. sanctions, while previous U.S. measures have failed to stop Iranian crude from reaching Chinese refiners.
#2. Iraq
Iraq is already struggling from the effects of the U.S.-Iran war. Iraq’s state budget is almost entirely dependent on oil exports, which have been devastated by the naval blockades and maritime crossfire in the Persian Gulf. Following the closure of the Strait of Hormuz, Iraq's southern oil exports plummeted by 75%, with monthly oil revenues dropping to a meager $1.2 billion, leaving the government unable to balance its books.
Iran’s natural gas is absolutely critical for Iraq’s energy sector, with Iran importing $4 billion to $5 billion worth of natural gas annually from its neighbor to fuel its power stations. Indeed, Iranian gas accounts for 30% to 40% of Iraq's electricity generation, and Trump’s warning that any country providing a lifeline to Tehran will face "tremendous economic consequences" directly threatens the temporary U.S. sanctions waivers Baghdad previously enjoyed.
Iraq is facing catastrophic power grid collapses if Washington fully enforces these secondary sanctions, hollowing out basic electricity access for millions of Iraqi citizens during peak season, according to Reuters.
#3. Turkey
Turkey’s pain from the war in Iran is set to only get worse as Washington tightens the noose on Tehran. Turkish manufacturing and textile sectors are reeling from soaring shipping costs and tightening supply chains. Turkey relies on Iran and the wider Gulf region for key manufacturing inputs, including everything from petrochemicals and helium to aluminum and around half of its fertilizer. Turkey is already facing energy supply disruptions coupled with acute inflationary pressures, with fuel prices surging by roughly 50%. These ballooning energy import costs are heavily weighing on Ankara's balance sheet, with the value of Turkey's energy imports projected to outweigh its total exports by up to $40 billion this year.
Meanwhile, Turkey’s 25-year deal to buy up to 9.6 bcm of natural gas annually from Iran via the Tabriz-Ankara pipeline officially expired at the end of July 2026, with the war preventing the two sides from negotiating a new agreement. Turkey’s imports of Iranian gas spiked 34% Y/Y to 4.5 bcm during the first half of 2026, eclipsing Russian supplies, with only Azerbaijan supplying more gas.
Turkey is far less dependent on Iranian gas than it was when the original supply agreement was signed. Ankara has expanded pipeline imports from Azerbaijan and Russia, built out its LNG import capacity and added floating storage and regasification terminals, giving it several alternatives when Iranian volumes disappear.
But replacing Iranian gas comes at a price. The Tabriz-Ankara pipeline delivers gas directly into eastern Turkey, where alternative supplies are more difficult and expensive to move, while Iranian pipeline gas has historically been among Turkey’s cheaper sources. Losing those volumes would not leave Turkey without gas, but it would force Ankara to lean harder on LNG and other suppliers just as the war is already pushing up its energy import bill.
#4. India
ndia has relatively little exposure to Iranian crude compared with China, although purchases have resumed under U.S. exemptions. India imported $707 million worth of Iranian oil during the first half of 2026, according to government data cited by Reuters.
U.S. sanctions have already reduced trade between India and Iran to a fraction of its former size. Bilateral trade fell to $1.63 billion in the 2025/26 fiscal year from $17 billion in 2018/19, with Indian exports now dominated by goods such as basmati rice, tea and pharmaceuticals, according to Reuters. That has left India with a substantial trade surplus with Iran, but the remaining trade is now directly exposed to Trump’s latest sanctions push.
India faces a much larger problem from the war itself. The world’s third-largest oil consumer imports close to 90% of its crude, leaving its economy highly exposed to the surge in energy prices. Higher import costs have put additional pressure on the rupee and inflation while increasing the government’s energy bill.
India’s remaining trade with Iran is heavily weighted toward Indian exports, including rice, tea and pharmaceuticals, with substantial volumes traditionally going through Dubai. The UAE’s decision to halt financial and commercial dealings with Iran has already disrupted that route, forcing Indian exporters to look for alternatives including Turkey. Further U.S. restrictions could squeeze what remains of a trading relationship that has already fallen more than 90% from its 2018/19 peak.
#5. United Arab Emirates
The UAE was one of Iran’s most important economic lifelines before the war, exporting roughly $21 billion worth of goods to Iran in 2024, equivalent to about 30% of Iranian imports. Iran also relied heavily on Dubai as a financial, logistics and re-export hub, making the UAE one of the most important routes connecting Iranian businesses to the wider global economy.
But Abu Dhabi has already moved to cut that exposure. On August 19, the UAE suspended all financial and economic dealings with Iran until further notice after detecting two ballistic missiles launched from Iran toward maritime traffic near Emirati waters. Tehran denied targeting the UAE. The move effectively puts the UAE ahead of Trump’s new sanctions push, sharply reducing the risk that Emirati companies will be caught maintaining the kind of commercial links Washington is now targeting.
That doesn’t mean the economic cost couldn’t still be heavy. The UAE was Iran’s largest source of imports before the war, while Dubai built decades of commercial ties with Iranian traders and businesses. Cutting those links therefore protects the UAE from Washington’s secondary sanctions, but also eliminates billions of dollars in trade.
By Alex Kimani for Oilprice.com
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