US Sanctions Egypt Bank, Spares China and India on Iran
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- US Treasury Department imposed sanctions on Egypt's Banque Misr for doing business with Tehran, proposing a rule to cut off the bank's UAE branches from US dollar transactions with correspondent banks; Egypt's central bank said it and the Foreign Ministry were engaging US officials.
- US Treasury also sanctioned one Hong Kong-based entity and one person linked to Iran's Bank Melli, per a department notice, while warning other countries to cut Iran ties or face secondary sanctions—an approach it billed as 'economic D-Day.'
- The Trump administration stopped short of imposing penalties against China and India, both major Iranian trade partners, citing potential repercussions for the US and global economies—a selective strategy explicitly acknowledged in Treasury's framing.
- Iranian President Masoud Pezeshkian told state media that Iranian exports and imports slumped nearly 35% because of US sanctions and a naval blockade of Iranian ports, though he noted Iran sold about 90 million barrels of oil during the June US-Iran memorandum of understanding.
- Ayatollah Mojtaba Khamenei, the new Supreme Leader who has not been seen publicly since the February 28 attack that killed his father Ali Khamenei, issued a written statement calling on the government to 'seriously address' inflation, unemployment, and price management as annual inflation hit 66%.
- Iran's Islamic Revolutionary Guard Corps navy contradicted Trump's claim that the Strait of Hormuz is open, stating ships cannot transit without Iranian permission; preliminary shipping data showed just 7 vessels transited Thursday, down from 17 the prior day and below the 10-day average of 15.
Why it matters: Treasury's selective targeting reveals its risk calculus: applying secondary sanctions to China or India could backfire on the US economy, so the administration is using smaller financial nodes—Egypt's Banque Misr and a lone Hong Kong entity—to maintain pressure on an Iranian economy where trade has already collapsed 35% and inflation runs at 66%. Meanwhile, the diplomatic track remains live, with Qatar brokering new 'creative' talks to reopen the Strait of Hormuz, through which just half the normal shipping volume is moving.
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