The United States has expanded its economic and military pressure on Iran, with the US Treasury announcing sanctions targeting the automotive and rail sectors and a Russia-linked parallel banking network, while President Donald Trump hinted that strikes could resume after the midterm elections scheduled for 3 November 2026.
The developments come 216 days after the US-Iran war began and on the 107th day since Washington and Tehran signed a memorandum of understanding on 18 June 2026.
The US administration said when the memorandum was signed that it included preventing Iran from obtaining a nuclear weapon and reopening the Strait of Hormuz to shipping. But differences over implementation and the conditions for ending military operations have persisted.
US Treasury expands sectoral sanctions on Iran
The US Treasury said the new measures, part of an operation it called “Economic Outcast”, target what it described as some of the remaining key elements of Iran’s industrial base, including automotive and rail conglomerates and manufacturing and steel networks. The Office of Foreign Assets Control issued two additional sectoral sanctions designations under Executive Order 13902, allowing sanctions against individuals and entities operating in Iran’s automotive and rail sectors.
Some measures were also based on Executive Order 13871, concerning Iran’s iron, steel, aluminium and copper sectors. The sanctions included Iran Khodro and Saipa, which the US Treasury said together account for more than 90% of the domestic car market and produce about 1.5 million vehicles annually.
The list also included Iran Khodro Diesel, Pars Khodro and Zamyad, along with Niroo Motor Shiraz and Niroo Motor Damavand. The ministry described the automotive sector as Iran’s largest non-oil-and-gas economic sector and a major source of revenue, saying its annual losses exceed $1 billion.
The ministry accused the sector of links to networks affiliated with Iran’s Islamic Revolutionary Guard Corps and of being used in trade-based money laundering. It also said the measures targeted foreign companies supplying car parts and raw materials from countries including Indonesia, the United Arab Emirates and Germany.
Russia-linked financial network placed under sanctions
In a parallel move, the Office of Foreign Assets Control sanctioned the A7 network, designating it a major transnational criminal organisation. The Treasury described it as a Russia-linked parallel banking system used by Iran and the Islamic Revolutionary Guard Corps to evade sanctions and transfer money through intermediary companies in other countries.
The Treasury’s Financial Crimes Enforcement Network proposed a rule banning the transfer of funds linked to transactions conducted by the network’s intermediary companies. It also issued an alert to financial institutions containing indicators to help detect and report suspicious activity.
The Treasury said the A7 network uses companies designed to make payments linked to sanctioned individuals and sectors appear to be ordinary business activity, using trade documents, import and export records and misleading commodity information. It added that the network claimed to have processed more than 2,000 transactions a day by January 2026, with a total volume exceeding 7.5 trillion roubles.
US Treasury Secretary Scott Bessent said his country was working to dismantle the financial infrastructure that enables Iran and other parties to evade sanctions and move money, adding that the measures were intended to isolate Tehran and those facilitating its financial dealings.
He said anyone unlawfully involved in financing US adversaries risked losing access to the US financial system. Under the sanctions, all property and interests of the A7 network in the United States or under the control of US persons are blocked, as are entities directly or indirectly 50% or more owned by sanctioned persons.
Trump rejects Iranian ceasefire offer
On the political and military front, Trump said in an interview published on Thursday 1 October that he had rejected Iran’s latest ceasefire offer because it was “not good enough”.
He left the door open to renewed bombing after the midterm elections, saying it remained “possible”, without disclosing which sites any new operations might target. Trump said the Iranian offer included a proposal to reopen the Strait of Hormuz, but considered the proposal as a whole insufficient to meet Washington’s demands.
New US military deployment to the Middle East
His position came as Tehran and Washington seek to resume contacts over the war and implement the memorandum of understanding, amid continued disagreements over shipping, sanctions and the conditions for ending operations. Trump’s remarks coincided with a new US military movement, with a naval group carrying more than 7,000 sailors and 2,000 marines heading to the Middle East, bringing the number of personnel involved in the new deployment to about 9,000.
The force includes the USS Theodore Roosevelt carrier strike group and the amphibious group attached to the USS Makin Island. The deployment could result in three US aircraft carriers being in the region by the end of October, raising the US naval presence to more than 20,000 sailors and marines, alongside hundreds of aircraft.
In the Strait of Hormuz, the United Kingdom Maritime Trade Operations centre reported that a tanker was hit by an unidentified projectile while transiting the waterway, causing a fire, and confirmed that the crew were safe. The tanker’s identity and the party responsible for the attack were not identified, as disruptions affecting shipping through the strait since the war began continue.
