Iran lashes out at U.S. sanctions amid economic toll at home

A mourner holds a portrait of Iranian Supreme Leader Ayatollah Mojtaba Khamenei amid a funeral procession for Khamenei's father, slain Supreme Leader Ayatollah Ali Khamenei, and family members in Tehran on July 6. | AFP-JIJI

REUTERS

Aug 29, 2026

DUBAI/CAIRO – Iran condemned the United States’ new economic sanctions on Friday as “state terrorism” while its supreme leader said he was banning acts that could harm “social cohesion” amid concern that more financial pain could spark unrest at home.

With the war now at the six-month mark, and negotiations at an impasse, U.S. President Donald Trump’s administration has stepped up efforts to punish Iran financially with what it has billed as an “economic D-Day.” The sanctions drive compounds the toll of the war on Iran’s economy, where annual inflation hit 66% last month.

Meanwhile, the standoff over the Strait of Hormuz — which handled a fifth of world oil supplies before the war — remains the conflict’s biggest unresolved flash point. Washington has warned countries to cut their business ties with Iran or face secondary sanctions, though the Treasury Department stopped short of actually imposing penalties.

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