There is always a winner in any major global oil crisis. In 1973/74, it was Saudi Arabia and its OPEC brothers who shifted the balance of power in the market away from the previous arrangement dominated by the West's 'Seven Sisters' to the oil producers of the Middle East. After the 2014-2016 Oil Price War, it was the U.S. whose earlier nascent shale oil sector resisted the threat to its very existence from Saudi Arabia and OPEC, reorganising into a meaner, leaner, lower-cost oil production machine. The U.S. was the winner again in the short-lived 2020 Oil Price War, and this, along with all the other major crises mentioned, is ****** ysed in full in my latest book on the global oil markets. The latest rupture in the global oil market order that followed the U.S.'s 'Operation Epic Fury' against Iran that began on 28 February has also produced a clear winner. It is neither the U.S., Saudi Arabia, nor the other OPEC states -- it is China. So, how inclined will Beijing be to heed Washington's newly announced sanctions on Iran ahead of the meeting of its President Xi Jinping with U.S. counterpart Donald Trump on 24 September at the White House?
The sanctions in question were announced on 20 August by U.S. Treasury Secretary Scott Bessent, who stated they would be "the ‌toughest sanctions in history" on Iran, under the umbrella of 'Economic D-Day' for the country. The direct sanctions on Iran aim for the complete financial isolation and economic shutdown of the regime by cutting off all domestic and international revenue streams. To this end, the U.S. Treasury blacklisted five core sectors of Iran's economy -- Digital ****** ets/Crypto, Technology, Gold, Aviation, and Shipping -- making any business operating within them subject to immediate ****** et freezes. At the same time, all longstanding humanitarian, academic, athletic, and personal remittance exemptions were indefinitely suspended, including a complete ban on non-commercial family money transfers and joint research collaborations. In parallel with this, the state-run Islamic Republic of Iran Shipping Lines (IRISL) and commercial aviation fleets were put under a strict operational embargo, cutting off access to foreign ports, refuelling, and aircraft spare parts. Immediate ****** et freezes were also levied against procurement networks, cyber warfare units, and business syndicates tied to the Islamic Revolutionary Guard Corps (IRGC).
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In tandem with this, the U.S. Treasury, along with sister organisations, will fully utilise secondary sanctions to force foreign governments and companies to choose between trading with Iran or trading with the U.S., under the umbrella of 'Operation Economic Outcast'. This aims to target the complete financial isolation of Tehran by cutting off its remaining economic lifelines. To that end, the U.S. Treasury has already blacklisted nearly 60 entities, individuals, and vessels, focusing heavily on thir