Pakistan to hold talks in Iran on US 'economic D-Day'

Pakistan's army chief was visiting Tehran on a mediating mission on Monday as the United States prepared to roll out "the greatest financial offensive ever" targeting Iran's trade partners.

Iran dismissed the US threat, vowing to shut down all oil exports from the Gulf "if the economic war continues". It issued a new warning to shipping not to pass through the Strait of Hormuz without its permission, listing 45 ships it said had violated its rules and threatening retaliation for any ship-to-ship transfers with them.

US Treasury Secretary Scott Bessent has promised to reveal severe measures on Iran, which has endured near-continuous economic sanctions since the Islamic Revolution of 1979, when he gives a press conference at 1pm EDT (1700 GMT) on Monday.

"At dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary," Bessent wrote in an opinion piece published in the Financial Times on Sunday.

Pakistan's army chief Asim Munir, who has built a personal rapport with US President Donald Trump, arrived in Iran on Monday for talks, Iranian media said. Pakistan said the visit was part of its efforts "to promote regional peace and stability", and a Pakistani source said Munir was expected to meet people close to Iran's supreme leader.

Projectile hits tanker near Saudi Red Sea port, monitors say

Two Pakistani sources said Trump had called Munir last week, with another saying the main request was to bring Iran back to negotiations. The White House did not immediately respond to a request for comment.

The US and Iran have not conducted air strikes on each other's militaries for weeks, but their last official face-to-face talks to end the six-month-old conflict took place in June and strikes on vessels in the Strait of Hormuz have continued.

A projectile struck a tanker west of the Saudi port city of Yanbu in the Red Sea on Monday, causing a fire on the main deck, shipping monitors from the United Kingdom Maritime Trade Operations said. They did not say who had launched the projectile. Iran's Houthi allies last month said they would block Saudi oil exports diverted to the Red Sea to avoid Hormuz.

Thousands of people have died, most of them in Iran and Lebanon, since the US and Israel began strikes on 28 February, degrading much of Iran's conventional military capacity and inflicting economic pain while killing Iran's then-Supreme Leader Ayatollah Ali Khamenei.

Yet Iran has preserved enough missile and drone capability to attack its Gulf neighbours and bring shipping in the Strait of Hormuz to a near standstill, pushing up world fuel prices. The exact state of Iran's nuclear program, which the Americans and Israelis aim to wipe out, remains unknown.

Oil prices eased on Monday after two weeks of gains as investors took profits ahead of the expected US announcement.

Without detailing specific measures, Bessent signalled the US would target "fearful nations" that practice "appeasement" by engaging with Iran's economy and financial system.

"They would do well to consider the consequences of sustaining it," he wrote in the Financial Times.

Iran has been bracing for the sanctions for days, issuing a series of statements hinting at a major military response.

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, on Sunday suggested economic retaliation.

"If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf," Rezaei wrote in a social media post. "Iran will regard any country’s participation in or support for America’s economic war against the Iranian people as an act of war."

China says sanctions and pressure tactics will not work

Bessent previously urged China to cooperate with the US. China has been the biggest buyer of Iranian oil for several years, although the US blockade of Iran's ports, renewed in mid-July, has already cut Iranian oil flows to China.

The Chinese foreign ministry said sanctions and pressure tactics do not help and that Beijing would do what was necessary to protect China's interests.

Iran's Deputy Foreign Minister Kazem Gharibabadi dismissed the latest moves from Washington, which has said the measures will bring down the Iranian government, saying that successive such declarations by the United States had come to nothing.

Though Tehran remains outwardly defiant, Iranian officials who spoke to Reuters have expressed concern that further economic punishment could increase hardships, reignite unrest and further erode the Islamic Republic's legitimacy.

Iran entered the war with high inflation, energy shortages and deep structural weaknesses, and must now contend with disrupted trade, lost production and the cost of rebuilding damaged infrastructure. A slide in the rial currency, which prompted protests in January that were violently suppressed, reached a new record low on Monday, 25% below its January level.