Iran Warns Neighbors: Join the US Economic Squeeze and Face Retaliation
On August 22, Iran's top security official, Mohsen Rezaei, warned that Tehran would treat neighboring countries as enemies and target their interests if they join a US-led campaign to cripple Iran's economy. The threat deepens the coercive diplomacy on both sides of a conflict now in its seventh month.
Rezaei, who serves as secretary of Iran's Supreme National Security Council, delivered the warning in a Saturday interview with state broadcaster IRIB. He said Iran is telling all nearby countries not to join what he called the US economic war. "Otherwise Iran will consider them as enemies," he said, according to Al Jazeera. He also cautioned that joining Washington's pressure campaign would provoke "seismic" retaliation, as reported by both Al Jazeera's live coverage and the Los Angeles Times.
Rezaei laid out a three-stage strategy for the region: first negotiate with neighboring countries, then try to diplomatically pull them away from America, and finally act against those that continue to align with Washington. The warning came after US President Donald Trump announced his government would launch the "most crushing economic operation" yet against Iran. Trump pledged "tremendous economic consequences" for any country that provides Iran "any type of lifeline." Treasury Secretary Scott Bessent echoed that stance, declaring: "You're either with us or against us" (Al Jazeera).
The threats on both sides unfold against an active armed conflict. The United States and Israel have been at war with Iran since February 28, 2026, when the two allies launched initial attacks against Tehran. A memorandum of understanding signed on June 17 called for an "immediate and permanent termination of military operations," but it failed to hold, and negotiations stalled. Control over the Strait of Hormuz — a narrow shipping lane at the mouth of the Persian Gulf through which a large share of the world's oil flows — remains a core sticking point. Iran shut down traffic through the strait early in the war, sending prices of oil and fertiliser skyrocketing.
Rezaei warned that Iran would target alternative oil-shipping routes out of the Gulf if regional states participate in US economic warfare plans. That threat extends beyond the Strait of Hormuz itself to the broader network of maritime chokepoints Gulf states depend on for energy exports, broadening the potential scope of disruption considerably.
Iran's diplomatic apparatus reinforced the message. The Ministry of Foreign Affairs decried the incoming US measures as an assertion of "extraterritorial sovereignty" over United Nations member states, meaning Washington would be claiming legal authority beyond its own borders. Foreign Minister Abbas Araghchi rejected US economic threats as "failed policies" that would stir further tension, according to AP News. Araghchi had earlier told the Plenary Meeting of the Conference on Disarmament that escalating armed conflicts imposed unjustified economic and humanitarian consequences on the Iranian people. The Foreign Ministry also called on all countries and international institutions concerned about peace and security to condemn US and Israeli actions.
Regional reactions to the initial February military campaign offer some indication of how neighboring states may position themselves. Turkey, Qatar, and Oman expressed serious concerns about the consequences of the US-Israeli military aggression against Iran, per an Iranian Foreign Ministry perspective. An Iranian Foreign Ministry overview document asserted that attacks directed against civilians beginning on February 28 were aimed at involving Iran's neighbouring countries to trigger escalation and new tensions.
Rezaei said the Trump administration hopes economic pressure will fracture Iranian society and force the war to end. Whether that calculus proves correct depends heavily on whether Gulf states, many of whom maintain security ties with Washington while conducting substantial trade with Tehran, calculate that the cost of defying the US exceeds the cost of defying Iran. The dual pressure campaign, economic from Washington and military-diplomatic from Tehran, leaves regional actors navigating an increasingly narrow corridor.
The broader context here is a conflict in which both sides have moved beyond strictly military instruments and are now weaponizing economic interdependence itself. The US campaign threatens third-party states with secondary consequences for maintaining commercial ties with Iran — meaning foreign companies and governments could face US penalties even if they are not American. Iran's response threatens those same states with military retaliation for complying. Gulf states that might have previously sought to hedge between Tehran and Washington now face a binary framing from both capitals simultaneously. Bessent's formulation, echoing a well-known post-September 11 ultimatum, signals that the Treasury intends to enforce compliance through sanctions architecture that can reach deep into global financial networks. Sanctions, in this context, are restrictions that cut a country or its trading partners off from parts of the international financial system. Iran's three-stage escalatory ladder, by contrast, suggests a phased approach designed to give neighbors an off-ramp before confrontation.
How regional governments weigh the threat of military retaliation against the risk of sanctions exposure, and whether any choose to publicly align with either side, will shape the conflict's trajectory as much as the military situation on the ground.
