On April 28, the U.S. Department of the Treasury announced sanctions against 35 individuals and entities linked to Iran’s shadow banking system. These measures are part of a broader initiative aimed at combating terrorism financing and circumventing existing sanctions, which reportedly facilitate the movement of billions of dollars.
The sanctions were enacted under the Economic Fury program by the Office of Foreign Assets Control (OFAC). The targeted individuals and companies are said to play a crucial role in managing the architecture of Iran’s shadow banking operations.
These networks enable Iran’s armed forces, particularly the Islamic Revolutionary Guard Corps (IRGC), to access the international financial system. They facilitate payments for illegal oil sales, procurement of missile components, and other military supplies, as well as fund transfers to Iranian-affiliated groups.
“The Iranian shadow banking system serves as a critical financial artery for its military, enabling activities that disrupt global trade and fuel violence in the Middle East,” stated U.S. Treasury Secretary Scott Bessent.
Bessent emphasized that illicit funds generated through this network support terrorist operations and pose threats to American personnel, regional allies, and the global economy. He warned financial institutions collaborating with these networks of potential serious repercussions.
OFAC has also alerted banks to the risks associated with transactions involving companies that pay the Iranian government or the IRGC for passage through the Strait of Hormuz. Such payments could expose any involved companies and financial institutions, both domestic and foreign, to sanctions risks.
The U.S. Treasury has specifically pointed out independent Chinese refineries that import and process Iranian oil. Some of these refineries reportedly utilized the American financial system for dollar transactions and the procurement of U.S. goods. China has previously expressed opposition to what it describes as “illegal” unilateral sanctions.
According to the U.S. Treasury, Iranian banks, cut off from the international financial system, rely on private entities known as “rachbari.” These entities manage thousands of foreign shell companies that facilitate payments for Iranian imports and exports. Rachbari coordinate with Iranian currency exchangers and front companies across various jurisdictions, allowing Iran to conduct sanctioned trade, particularly for the IRGC, the Iranian military’s General Staff, and the National Iranian Oil Company.
Since February 2025, OFAC has imposed sanctions on approximately 1,000 individuals, vessels, and aircraft linked to Iran as part of a campaign of maximum economic pressure against Tehran.
On April 11, trilateral talks between the U.S. and Iran, mediated by Pakistan in Islamabad, failed to reach an agreement on a lasting ceasefire. U.S. Vice President Vance noted that disagreements over “two or three key issues” hindered progress. Following these discussions, President Trump announced on April 13 that the U.S. Navy would initiate a blockade of the Strait of Hormuz due to the lack of consensus on nuclear disarmament.
Trump indicated that U.S. military forces would intercept any vessels that paid fees to Iran for passage through the strait. He further warned Iran that any military attacks on U.S. naval vessels would result in severe retaliation.
On April 18, Iran declared it would re-establish strict control over the Strait of Hormuz in response to the U.S. maritime blockade. By April 20, Trump stated that the likelihood of extending a two-week ceasefire with Iran was very low unless an agreement was reached by the April 22 deadline.
On the evening of April 21, Trump announced via Truth Social that he was again postponing military action against Iran at the request of the Pakistani Prime Minister, citing the Iranian government’s internal divisions. He indicated that the ceasefire would remain in effect until a unified Iranian proposal was submitted, while the U.S. would continue its maritime blockade.
Iranian state media reported that Trump had unilaterally extended the ceasefire, while Iran rejected the U.S. negotiation terms. Earlier reports indicated that the Iranian negotiation team had communicated it would not attend the Islamabad talks, seeing no prospects for engagement.
An advisor to the Iranian parliament speaker remarked on social media that Trump’s extension of the ceasefire was meaningless, asserting that a losing party cannot dictate terms. He suggested that this move was a tactic to buy time for a sudden strike, and that the continuation of the blockade would warrant a military response.
The Strait of Hormuz is a vital energy corridor, accounting for approximately one-fifth of global oil and liquefied natural gas supplies. Instability in this narrow maritime route immediately impacts global markets, as evidenced by events in March 2026. Currently, the threat of Iranian strikes has effectively blocked shipping, prompting some companies to limit their operations in the area.
On March 13, a Turkish oil tanker successfully navigated the strait despite the Iranian blockade. The following day, President Trump urged European and Asian nations to deploy naval vessels to protect trade routes, announcing that U.S. Navy ships would soon escort commercial tankers.
By March 20, an international coalition comprising the UK, France, Germany, Italy, the Netherlands, Japan, and Canada was formed to condemn Iranian attacks on civilian infrastructure and pledged to ensure the safety of maritime traffic. On March 21, Iranian naval forces escorted an Indian tanker through the strait.
On March 22, Tehran stated that the strait was open only to non-enemy vessels, while Trump threatened to destroy Iran’s electricity infrastructure if the blockade was not lifted within two days. On March 25, Iran reaffirmed its stance in a note to the UN Security Council, officially prohibiting the passage of U.S., Israeli, and other “aggressive” vessels, allowing only “non-hostile” ships with prior coordination with Iranian authorities.
Despite these restrictions, on March 29, the tanker P. Aliki carrying Saudi oil managed to traverse the strait along the Iranian coastline. However, resource shortages became increasingly acute, prompting Trump to acknowledge the scale of the issue on March 31, as he addressed countries suffering from aviation fuel shortages.
Previous reports have highlighted the significance of the Strait of Hormuz for the global oil market, discussing ways to reduce dependency on this route and exploring potential alternatives.
The U.S. Treasury has imposed sanctions on 35 entities linked to Iran's shadow banking system, aimed at disrupting financial networks supporting terrorism. This action is part of a broader strategy to counter Iran's military financing and maintain pressure amid ongoing geopolitical tensions.