Live updates: Oil prices fall on hopes of Iran

• Oil prices sink: Global oil prices have fallen for a third consecutive day after Iran and Oman said they had discussed a framework to establish a temporary shipping route through the Strait of Hormuz.

• New route: Iran’s deputy foreign minister said the yet-to-be-finalized deal with Oman would see the closure of a UN-authorized – and Tehran-opposed – shipping channel along the coast of Oman. The countries would also start a demining effort in the critical waterway

• US pressure: The US Treasury Department has begun its campaign to tighten sanctions against Iran, targeting aviation, shipping, technology, gold and digital assets such as cryptocurrency. Washington is also threatening damaging new sanctions on countries refusing to cut economic ties with Iran.

A major petrochemical facility in southwest Iran has suspended production as authorities seek to reduce electricity consumption amid a heatwave and power shortages, according to a Iranian media report.

Arvand Petrochemical Company located in the Mahshahr area said it had suspended production activities since August 22 following instructions from the state-owned National Petrochemical Company, according to Petrochemiha, the country’s news outlet specialising in petrochemical and energy sectors.

The company said the suspension was due to electricity shortages caused by temperatures soaring while trying to manage energy consumption in Mahshahr, reported Petrochemiha, citing CODAL, Iran’s official stock-market corporate disclosure system, said.

National Petrochemical Company has been under US sanctions since 2019. The US has now tightened financial measures against Iran in the areas of aviation, digital assets such as cryptocurrency, gold, shipping, and technology.

Iranian state media IRNA reported earlier in July that the country had lost around 230 million cubic metres per day of natural gas production capacity since the start of the US war, while Tehran officials urged the public to limit energy use as temperatures in the south soared above 50 degrees Celsius.

Tehran announced earlier in August that it will restore 95 million cubic meters per day of lost gas production by repairing gas-processing facilities damaged in Asaluyeh, located by the Persian Gulf.

Israeli Prime Minister Benjamin Netanyahu has praised the latest US economic measures against Iran, saying they would “tighten the siege” by targeting countries that do business with Tehran.

In a speech at the Binyamin Regional Council in the occupied West Bank, Netanyahu acknowledged that the Trump administration did not take significant steps against Iran itself, but rather against the country’s allies.

When Netanyahu last visited Washington in late-July – his first meeting with President Donald Trump since before the start of the war in February – he said he laid out three options for the US: reaching an agreement, a renewed military campaign, or economic pressure.

Choosing to return to sanctions and economic pressure, Netanyahu said that Trump “reaffirmed that decision in a very, very, very strong way” with the latest measures. On Monday, US Treasury Secretary Scott Bessent threatened new sanctions on countries refusing to cut economic ties with Iran but stopped short of imposing major new penalties.

Netanyahu added that “the challenge of Iran has not yet ended” and that he is “determined” to ensure Iran posed no threat.

Iranian politicians are divided over a move by the country’s parliament to approve a bill that would criminalize communications with media outlets deemed hostile to the Islamic Republic.

The bill is yet to become law, with some Iranian members of parliament raising concerns that the wording is too broad and could affect essential activities. Moein Khazaeli, one Iranian human rights lawyer, warned that it could amount to “a fresh legal catastrophe.”

Iranian state news agency IRNA reported earlier this month that politicians were split over bill. Before the parliament vote this month, Ebrahim Azizi, chairman of Parliament’s National Security and Foreign Policy Committee, said he believed the bill was aimed at creating “transparency in channels of communication with foreigners.”

But others said the bill would not solve the problem of foreign interference. Gholamhossein Karbaschi, a reformist political figure, said: “The problem begins when we assume that the main route of infiltration is simply journalists, interviews or foreign media, and that restricting these areas can solve a significant part of the problem.”

Iran has, however, proceeded to prosecute individuals who were in contact with foreign media under other national security and espionage laws, raising questions about what legal gap the new bill is intended to fill.

Iranian photojournalist Yalda Moaiery, whose stories and photographs have appeared around the world, has herself become a target. She was sentenced to 15 years in prison earlier this month by an Iranian court with “activities in furtherance of the interest of the Zionist regime against national security.” She hopes to appeal the decision.

Moaiery appeared on CNN in February and this month. She provided a rare eyewitness account from inside Iran, even as the regime attempted to block communications with the outside world.

Global oil prices fell for a third consecutive day on Wednesday after Iran and Oman said they had discussed a framework to establish a temporary shipping route through the Strait of Hormuz.

Iran and Oman also said they would attempt to “clear mines” from the waterway, according to a press statement from both countries’ foreign ministries.

Brent futures, the global benchmark, declined 3% to trade at almost $86 a barrel shortly before 6 a.m. ET while WTI, the US benchmark, dropped 2.8% to $80 a barrel.

The contracts have fallen 9% and 8%, respectively, this week despite the US Treasury Secretary Scott Bessent having threatened “economic D-Day” on nations refusing to cut business ties with Iran.

In the absence of details or a specific timeline for imposing penalties, traders are mostly in “wait-and-see mode,” Deutsche Bank analysts wrote in a Tuesday note.

The Trump administration appears to have landed on a fallback strategy in the Iran war after military strikes and negotiations failed to deliver victory: threats of harsh economic sanctions.

Treasury Secretary Scott Bessent has called them the “toughest sanctions in history,” which will “collapse this regime.” He’s even called it an “economic D-Day” for Iran, comparing it to the historic invasion of Nazi-occupied France during World War II.

There’s just one problem: Making good on those tough words requires not just getting tough on Iran, but also getting tough on China, which is Tehran’s No. 1 trading partner.

And Trump and his administration have proved quite reluctant to do that.

When Bessent rolled out the economic strategy Monday, he didn’t name specific countries that would be punished if they don’t cut ties. And the announcement notably did not include secondary sanctions on the large Chinese banks that facilitate Beijing’s purchases from Iran.

China buys as much as 90% of Iran’s oil. Economic analysts have told CNN that targeting these banks and Chinese companies would be crucial to exacting a major toll on Iran’s economy.

But not for the first time in recent days, Bessent punted on exactly what would be done on that front. He suggested messages were being sent — saying “no one is above the reach of US sanctions” — but didn’t detail what will happen with China.

Iran is expanding its defense capabilities, an Iranian army commander said Wednesday, after much of the country’s equipment was degraded by US-Israeli strikes in the early days of the war.

The commander said that based on that experience, Iran is “producing new systems and equipment, all relying entirely on Iranian knowledge and expertise.”

In May, Iran had already restarted some of its drone production during a six-week ceasefire, rapidly rebuilding military capabilities degraded by US-Israeli strikes, according to two sources familiar with US intelligence assessments.

Iran’s status as an economic outcast is nothing new. It’s been a pariah in the eyes of much of the world for literally decades.

Over the years, the United States has slapped Iran with countless sanctions targeting its banking system, shipping companies, oil industry and military.

That’s why Operation Economic Outcast, the highly-anticipated sanctions campaign unveiled by US officials this week, doesn’t pack as much of a punch as the Treasury Department’s “Economic D-Day” rhetoric might suggest.

Years and years of punishing sanctions have limited how much further action the United States can take.

“It’s hard to know what to make of ‘Operation Economic Outcast’ because it’s mostly just an announcement that there will be future announcements,” Justin Wolfers, economics professor at the University of Michigan, wrote in his Substack newsletter.

When US Treasury Secretary Scott Bessent unveiled “Operation Economic Outcast,” threatening damaging new sanctions on countries that refuse to stop doing business with Iran, he didn’t name the one country that could decide its success or failure: China.

The world’s second-largest economy has long been a critical economic lifeline for Tehran, buying up the vast majority of its oil exports – worth an estimated tens of billions in US dollars last year – in addition to other trade.

Bringing it on board with the White House’s latest effort to subdue an Iranian leadership stubbornly defiant after almost six months of war, however, is an extremely tall order.

Beijing flatly rejects what it calls “unilateral” US sanctions and has long defended its right to regular trade with partners like Iran and Russia. It also surmises that Washington would be wary of triggering a broader economic confrontation that would hurt both countries, right ahead of the US midterms.

On Tuesday, following Bessent’s press conference, China’s Foreign Ministry vowed to “take all necessary measures” to safeguard its “own legitimate rights and interests” in the face of US sanction threats.

“Economic warfare and maximum pressure will not help resolve the issue; they will only further intensify tensions and conflicts, create spillover risks, disrupt the global economic and financial order,” ministry spokesperson Lin Jian said.

Bessent’s threat also comes ahead of a highly anticipated visit by Chinese leader Xi Jinping to the US next month, where the two sides could make progress on extending a critical trade truce set to expire later this fall.

A key route currently used by ships transiting the Strait of Hormuz would close under a pending Iran-Oman deal, according to a senior Iranian diplomat.

After weeks of fraught discussions, Tehran and Muscat outlined a proposal Tuesday to jointly establish a temporary shipping channel through the strait, and to “clear mines.”

Iran’s Deputy Foreign Minister Kazem Gharibabadi later said the yet-to-be-finalized deal would see the closure of the southern route, a UN-authorized shipping channel that follows the coast of Oman and that Iran vehemently opposes, state-linked Press TV reported.

The earlier Omani statement did not mention the route’s closure.

In recent weeks, the US government and ship tracking organizations have noted a growing amount of oil is transiting the critical waterway, despite Iran’s insistence it is closed. Much of that is traveling via the Omani route – or has taken that route as “dark” transits, during which ships turn off their tracking transponders, CNN reported last week.

While Iran has attacked dozens of ships that attempted to travel the southern route, many ships have recently chosen to ignore Iran’s demands and cross the strait with the promise of protection from US naval forces.

Gharibabadi said the potential new joint route agreed with Oman would see vessels “pass through Iranian waters in both directions,” the Press TV report said.

But whether the US, which insists the strait is international waters, would accept the new route is unclear. Last week, President Donald Trump threatened to attack Oman if it interfered with US efforts in the waterway.

Washington has worked to undermine Tehran’s claims of control of the strait, warning shipping firms on Monday they could face sanctions or penalties even if they comply with information requests from Iranian agencies over transits.

Iran and Oman outlined a proposal Tuesday to jointly establish a temporary shipping channel through the Strait of Hormuz, according to regional officials, after weeks of fraught discussions between the two countries.

Tehran and Muscat discussed a “phased framework” for a joint project facilitating a “temporary shipping corridor” and to “clear mines,” a press statement from the Iranian and Omani foreign ministries said.

Officials will carry on talks “with the aim of reaching agreement on a permanent shipping corridor and the future administration of the Strait,” the statement added.

Omani Foreign Minister Badr bin Hamad Al Busaidi visited Iran and held consultations with Iranian Foreign Minister Abbas Araghchi, the state-run Oman News Agency (ONA) reported earlier.

After the meeting, the Omani foreign minister said he was “hopeful” both nations would “soon announce a temporary corridor” for the strait. “Future management of the Strait and a permanent solution will follow in due course,” he posted on X. “Discussions with regional partners will be conducted in support of peace and cooperation, stability and freedom of navigation,” Al Busaidi added.

Araghchi wrote in a post on X that the proposed deal showed that “Iran’s commitment to peace and stability is matched by steadfast diplomacy with our neighbors.”

Over the past few weeks, Tehran and Muscat held negotiations to stabilize shipping in the waterway, which has emerged as a key bargaining chip in stalled discussions between Iran and the US, following months of regional violence.

Earlier today, US President Donald Trump reiterated that all mines in the Strait of Hormuz have been removed or detonated, and he threatened to destroy any boats that try to place more. “We are watching every square inch of the strait,” he said.

Meanwhile, Qatar Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani and Iranian Foreign Minister Abbas Araghchi held a telephone call and discussed the proposed temporary shipping channel, the Qatar foreign ministry said Tuesday.

Qatar has previously voiced support for the efforts between Oman and Iran to reach an agreement over the Strait of Hormuz, despite US President Donald Trump’s threat to attack Oman if it interferes with US operations in the strategic waterway.

A sweeping new US sanctions campaign targeting Iran and its economic partners is drawing criticism from China and defiance from Tehran, with senior Iranian officials vowing Washington’s economic pressure will fail.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf claimed Tuesday that after suffering defeat “in the military and political war,” the United States “will also be defeated in its economic actions,” according to Iran’s semi-official Tasnim News Agency.

Here’s a look at what’s in the new measures under the Trump administration’s “Operation Economic Outcast,” a campaign Treasury Secretary Scott Bessent described as an effort to “sever every economic lifeline” sustaining Iran’s government.

Sanctions on more than 60 targets: According to Bessent, the Treasury Department’s Office of Foreign Assets Control is sanctioning “over 60 entities, individuals, and vessels across the world” accused of helping Iran procure nuclear and missile technology, conduct cyber operations and generate oil revenue.

Five sectors targeted : The administration announced new sanctions determinations covering five sectors that Washington views as critical to Iran’s economy: digital assets, technology, gold, aviation and shipping. Bessent said the measures increase the risk of sanctions for foreign companies and individuals that continue doing business with Iran in those sectors.

Pressure on countries dealing with Iran: The treasury secretary said US officials are meeting governments worldwide and informing them that Washington expects action against economic activities linked to Iran. “Every country has a defined timeline to shut down activities we have identified,” Bessent said. “If they do not take action, we will do so unilaterally through Treasury authorities.”

Iranian financial networks in focus: Bessent specifically singled out Iran’s Bank Melli, saying: “Every Bank Melli branch must be shuttered.” He also warned that entities facilitating money laundering on behalf of Iran could lose access to the US dollar system.

Oil exports and sanctions evasion: The treasury secretary said Washington has mapped Iran’s networks used to “smuggle oil and evade sanctions” and pledged a “zero-leakage approach” to cut off revenue streams that fund the Iranian government and the Islamic Revolutionary Guard Corps.