As collapse risks emerge, the US economic chokehold on Iran reaches extreme leverage

U.S. economic pressure on Iran has reached one of its strongest points in decades, but inconsistent enforcement has prevented the sanctions from achieving their full effect, according to a former Treasury sanctions expert.

Miyad Maleki, who played a central role in Treasury Department sanctions campaigns against Iran and its network of proxy groups, said in an on-camera interview that the current moment reflects a rare convergence of economic, political and diplomatic leverage against Tehran.

“We have never in the history of our conflict with Iran … since 1979 had leverage to the level we have today,” Maleki said.

His assessment came after President Donald Trump signaled increasing pressure on Thursday, writing on Truth Social that the United States “has complete control over the Strait of Hormuz” and that it is effectively “tightened” until Iran agrees to a deal.

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Maleki argues that the current moment is a turning point because several tools of pressure—sanctions, a U.S. naval blockade, and tougher enforcement—are being applied simultaneously for the first time in years. Unlike previous cycles, he said, the strategy is now directly targeting Iran’s oil exports and the networks that help move them, raising the risk of a rapid economic squeeze.

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He said Iran’s oil reserves could run out in at least two to three weeks, forcing production cuts, while gasoline shortages could hit on a similar timeline due to heavy reliance on imports. With economic losses estimated at $435 million a day, the pressure could spill over into the financial system, which would struggle to pay the regime and raise the risk of renewed unrest.

Maleki said the real benefit lies in sustained economic pressure and implementation.

At the center of that pressure is an Iranian economy he described as “on the brink of collapse,” driven by years of sanctions and compounded by recent disruptions.

He pointed to triple-digit food inflation, sharp currency devaluation and a nearly 90% collapse in purchasing power, as well as potential long-term oil revenue losses of up to $14 billion a year.

Maleki, who is currently a senior fellow at the Foundation for Defense of Democracies, estimated that the current situation is costing Iran “about $435 million per day in combined economic losses … with the blockade and the closure of the Strait of Hormuz.”

A key driver of that pressure is the Strait of Hormuz, long seen as Iran’s main tool in the global energy market. Maleki said the pace has changed.

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“Iran’s economy is more dependent on the Strait of Hormuz than any other economy,” he said, calling its closure a form of “economic self-sabotage.”

Countries in Asia — including Japan, South Korea, India and China — are most vulnerable to disruptions, with many building stockpiles. “Japan’s oil reserves are very significant. China’s is the same,” Maleki said.

Still, the region remains heavily dependent on waterways, with about 75% of liquefied natural gas supplies for countries including India, China and South Korea flowing through the strait.

Inside Iran, however, the vulnerabilities are more immediate. Despite having abundant oil reserves, the country imports 30 million to 60 million liters of petrol daily to meet the internal shortage of 35 million liters.

“If they run out of gasoline … they will go into a big crisis domestically,” Maleki said, noting that past shortages and price hikes have sparked widespread protests.

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A US naval blockade targeting Iran’s oil exports is intensifying economic pressure, the regime’s main source of revenue.

A senior administration official said the Treasury Department is stepping up enforcement under what it describes as an “economic rage” campaign, using financial and maritime tools to squeeze Iran’s revenue streams.

The official said the strategy is focused on “systematically reducing Iran’s ability to generate, move and repatriate funds,” including limiting maritime trade through a naval blockade, which targets Iran’s primary source of revenue from oil exports.

Economic pressure is also increasing worldwide. The official said the Treasury has warned banks in China, Hong Kong, the United Arab Emirates and Oman that facilitating Iranian trade could expose them to secondary sanctions, signaling a more aggressive approach to enforcement beyond Iran’s borders.

Treasury has issued sanctions on more than 1,000 targets since 2025 under the current Maximum Pressure campaign, the official said, aimed at disrupting Iran’s oil trade and financial networks.

The official added that Iran was facing immediate logistical constraints, warning that storage capacity on Kharg Island – the country’s main oil export terminal – could fill up within days if exports remain disrupted, potentially forcing production shut-ins.

“Treasury will continue to freeze funds stolen by the corrupt leadership on behalf of the people of Iran,” the official warned.

A new analysis by United Against Nuclear Iran says the embargo is already blocking high-value shipments, although some Iran-related vessels continue to transit the region.

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“Effectiveness should not be measured by the total number of Iran-related vessels at sea,” the group said in a statement on April 22. “But whether the U.S. is disrupting high-priced Iranian oil exports … and preventing large-scale illegal shipments.”

At least 29 vessels, including several large crude carriers, have been diverted or returned to port, according to reports.

The embargo, announced on April 12 and implemented by US Central Command, is designed to cut Iranian crude oil exports, particularly shipments to China, prioritizing high-impact targets.

While the sanctions are clearly cutting edge, Maleki said their impact has been limited by inconsistent implementation across successive US administrations.

US sanctions on Iran have been in place for years, targeting the country’s oil exports, banking sector and access to the global financial system.

Under the Obama administration, sanctions under the nuclear deal were partially lifted. The first Trump administration reimposed “maximum pressure,” but enforcement was gradual and limited in duration. The Biden administration later eased the implementation in pursuit of diplomacy.

He argued that cycles of tightening and easing — including rollbacks and pauses in implementation of sanctions under the Iran nuclear deal — have allowed Tehran to adapt.

“What’s different now,” Maleki said, is the combination of ongoing sanctions with real-time enforcement measures that directly restrict Iran’s ability to export oil — a move that was largely absent in earlier phases.

To increase pressure, Maleki said Washington should continue enforcement through secondary sanctions, particularly targeting foreign banks and companies that facilitate Iranian trade.

Importantly, he minimized the possibility that outside forces could offset the pressure.

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“I really can’t point to any other nation … that would give the Iranian regime a lifeline,” he said.

“At some point in the next few weeks to a few months, they will not only face gasoline shortages and oil production disruptions, but also major banking problems to pay the salaries of government employees and IRGC personnel,” he said. “The Iranians have run out of patience again, as they did before, and they’re back on the streets. I’m not sure you want unpaid IRGC troops back on the streets willing to kill their fellow Iranians with the same grievance they have now, which is a collapsed economy.”

Original article source: As collapse risks emerge, the US economic chokehold on Iran reaches extreme leverage