Europe’s third-way ambitions on Iran give way to alignment with Washington

The latest US strikes on three Iranian oil tankers mark a significant escalation in Washington’s economic campaign against Tehran, moving beyond sanctions and blockade to the physical destruction of vessels used to export Iranian oil.

US forces on September 5 disabled two tankers near Kharg Island and Jask and destroyed a third in the Gulf of Oman, according to US Central Command, which described the vessels as part of a “multibillion-dollar shadow network” supporting the IRGC and its regional partners.

The strikes followed Iranian ballistic missile attacks on US naval forces that caused no American casualties. CENTCOM commander Adm. Brad Cooper warned Washington was prepared to impose an “even higher economic cost” on Tehran.

The significance of the strikes lies less in the loss of three ships than in the change in tactics. Washington has spent years trying to make Iranian oil harder to sell through sanctions, restrictions on financial transactions and pressure on buyers and shipping networks. Since mid-July, the US naval blockade has added a physical barrier.

Now, the vessels themselves are becoming targets.

From financial to physical risk

The shift comes as Iran’s oil exports are already under severe pressure.

Ship-tracking data indicated Iranian crude loadings fell to roughly 220,000–255,000 barrels per day in August, from about 740,000 bpd in July and peaks close to 2 million bpd before the conflict.

For weeks, no meaningful Iranian crude cargoes were able to reach China through the Strait of Hormuz, leaving more oil in floating storage inside the Persian Gulf.

Iran has spent years building a shadow shipping network capable of operating around Western sanctions, relying on opaque ownership structures, reflagging, manipulation of vessel-tracking systems and ship-to-ship transfers to move crude, particularly to China.

Those methods are useful when the main challenge is avoiding financial sanctions or detection. They offer far less protection if the vessels themselves become military targets.

Sanctions forced Iran to find ships willing to evade Washington. The new strategy may force it to find ships and crews willing to risk being attacked.

That could make the shadow fleet more expensive and difficult to operate. Many of its tankers are aging vessels already working outside conventional Western insurance and maritime-service networks.

If owners, crews and operators come to regard Iranian-linked voyages as carrying a serious risk of attack, some may demand greater compensation or decide the trade is no longer worthwhile.

Washington cannot, however, simply eliminate the shadow fleet overnight. The network is dispersed and adaptable. Ships can change names, flags and ownership structures, while Tehran can alter loading patterns or move ship-to-ship transfers farther from areas dominated by US forces.

But every vessel lost imposes another cost. Iran must replace it, find another operator willing to accept the risk or leave more crude stranded in storage.

Floating storage offers only temporary relief. Oil held offshore does not generate revenue until it reaches a buyer, and prolonged disruption can eventually force producers to cut output as storage fills.

The question is therefore not whether three tanker strikes can dismantle Iran’s export system. They cannot. It is whether repeated physical losses can gradually undermine the commercial network that has allowed Tehran to keep selling oil despite years of sanctions.

A wider energy battlefield

That strategy carries an obvious risk: once Washington treats Iran’s oil-export system as a military target, Tehran has a stronger incentive to widen the energy battlefield.

Iran has already used attacks and threats against maritime traffic as a means of imposing costs on its adversaries. The Strait of Hormuz remains central to that strategy because of the enormous volumes of oil and liquefied natural gas that normally pass through it.

Further reducing Iranian export revenues could weaken Tehran’s ability to finance the IRGC and allied armed groups while increasing the economic cost of continued confrontation.

But direct attacks on tankers could also reinforce the Iranian leadership’s argument that compromise will not end US pressure and that imposing costs on regional energy flows is one of Tehran’s remaining forms of leverage.

That matters well beyond Iran.

Saudi Arabia and the United Arab Emirates have invested heavily in export routes that partially bypass Hormuz, including Saudi pipelines to the Red Sea and the UAE’s link to Fujairah. But those alternatives cannot fully replace normal flows through the Strait, while Kuwait and Iraq remain particularly dependent on the waterway.

Even without major damage to regional infrastructure, greater insecurity can raise war-risk insurance premiums, freight rates and other costs for commercial operators.

The tanker strikes therefore strengthen Washington’s leverage only if they can impose additional costs on Tehran without triggering a broader contest over the region’s energy infrastructure.

Physical attacks may hurt an Iranian oil-export system that has spent years learning to circumvent sanctions. But they also give Tehran stronger incentives to retaliate against the system through which its neighbors export their own energy.

The strategic gamble for Washington is therefore not simply whether tanker strikes can further squeeze Tehran’s oil revenues. It is whether Iran can be made to bear those costs without deciding that its adversaries’ energy exports should bear them too.

Within six weeks, two of Iran’s neighbors have opened their markets to the satellite internet service. Iraq authorized Starlink on July 17. The United Arab Emirates granted it a 10-year general license on Aug. 28, and public sales began on Sept. 3.

SpaceX reportedly waived subscription fees for terminals operating inside Iran during the January 2026 internet shutdown, leaving access to the illegal hardware itself as one of the main obstacles.

Until now, Starlink terminals reaching Iran have largely had to pass through black-market supply chains involving multiple intermediaries. Legal sales in two nearby countries could shorten those chains, increase the supply of terminals and ultimately drive down prices inside Iran.

A standard Starlink kit now sells for around $400 in the UAE. At the end of August, the same model was selling for around $2,100 on Iran’s black market, while the smaller Starlink Mini was selling for around $1,850, according to data collected by Starlink4Iran.

During the January shutdown, the price of a standard kit surged to around $3,000, while the Mini reached around $2,300.

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The premium reflects more than profit. Equipment entering Iran passes through intermediaries facing the risks of confiscation and punishment, along with the costs of moving devices covertly across the border.

Legal markets next door will not eliminate those risks. But they could reduce the number of intermediaries involved and make terminals cheaper and more plentiful.

A new route from Iraq

The potential impact is particularly significant in Iraq, which shares a long land border with Iran and has extensive trade and passenger traffic with its neighbor.

Ahmad Ahmadian, an internet freedom activist and director of the nonprofit Holistic Resilience, which works to expand Iranian access to Starlink, said Erbil has already been an important source of communications equipment reaching Iran through informal channels.

Legalization could broaden that network to include traders and people who regularly travel between the two countries, he said.

During periods such as Arbaeen, the annual Shiite pilgrimage when millions of travelers move between Iran and Iraq, thoroughly inspecting everything they carry becomes more difficult, Ahmadian said.

Ahmadian expects some travelers to bring Starlink equipment into Iran for their own use or resale. The devices, he said, could even become a kind of “souvenir” brought back from Iraq.

The smaller Starlink Mini could prove particularly attractive. Roughly the size of a laptop, it is easier to transport than a standard dish, although its official availability in Iraq has yet to be confirmed.

There are still significant obstacles to an Iraqi Starlink market.

The license was issued by Iraq’s Communications and Media Commission, but the Communications Ministry says it has not signed a separate agreement with SpaceX and has raised objections over pricing and routing traffic through Qatar.

The Kurdistan Region has separate regulations, and as of early September no final agreement with SpaceX had been announced.

According to Iraqi officials, around 40,000 unauthorized terminals were already operating in the country before the license was issued, reportedly serving around 200,000 people, including government and security users.

Regulatory disputes may therefore slow the development of the legal market, but they are unlikely to eliminate an existing network of sellers, installers and users.

The UAE offers another potential source.

Starlink equipment was already available in Dubai’s free-trade zones before the general license was issued, and some terminals in Iran have previously been sourced there through intermediaries. Legal public sales could make the equipment easier to obtain.

One dish, many users

More terminals inside Iran would not necessarily benefit only those wealthy enough to buy one.

Some Starlink owners already share their connections with other users, including through VPN and other circumvention services.

Tools such as NasNet Connect can use Iran’s own National Information Network, or NIN, to connect users to a local gateway whose route to the international internet is provided by Starlink. That matters because Iranian authorities have repeatedly cut access to the global internet during periods of unrest and crisis while leaving the NIN and approved domestic services functioning.

A user’s connection to the local gateway can therefore still travel over Iranian telecommunications infrastructure, while the gateway’s route to the outside world exits through Starlink, beyond conventional international connections controlled by the state.

For relatively light uses such as messaging and web browsing, a single terminal can potentially support around 20 to 30 users, according to Ahmadian. Video calls, streaming and large downloads substantially reduce that number.

There is also a financial incentive.

Dish owners can sell VPN or other internet access to recover their costs or even generate income. If cheaper hardware reduces the initial investment, more terminals could potentially become gateways for groups of users rather than individual connections.

None of this makes such networks invisible. Iranian authorities can attempt to identify servers and dishes, disrupt communications and interfere with satellite signals.

But a growing number of privately operated connections would make the task of sealing Iran off from the international internet more complicated.

Free, for now

There is another important limitation: a Starlink terminal bought legally in Iraq or the UAE is not guaranteed to work once brought into Iran.

SpaceX retains control over which terminals are activated and whether they remain connected. It reportedly waived subscription fees for terminals operating in Iran during the January 2026 blackout but did not say how long the arrangement would last.

Ahmadian said active terminals in Iran have continued to operate without subscription charges in recent months. Some accounts previously disconnected for non-payment have also been restored, he said.

It remains unclear whether that policy will continue indefinitely or whether newly arrived terminals bought in Iraq or the UAE will automatically receive free service.

Using Starlink also carries significant personal risk inside Iran. The Islamic Republic considers the equipment illegal and has sought to disrupt satellite connections, locate terminals and punish users.

Nor can satellite internet come close to replacing Iran’s conventional internet infrastructure. Even if black-market prices fall substantially, the hardware will remain beyond the reach of many households.

But for journalists, activists, businesses and families who have lived through repeated internet shutdowns, Starlink increasingly serves as something different: a backup route to the outside world when Tehran cuts conventional connections.

The arrival of legal Starlink markets in Iraq and the UAE does not take Iran’s internet kill switch out of the government’s hands. But it could mean fewer doors close when the switch is thrown.

Sequences of Copernicus satellite images comparing the months before the war with the period under the blockade show a striking change at both ports.

At Shahid Rajaee near Bandar Abbas, pre-war images show vessels occupying multiple berths and denser use of the container terminal, while later images show far fewer ships and large sections of the port appearing largely inactive.

After

Before

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Copernicus satellite images from January 2, 2026 and September 4, 2026 show Shahid Rajaee Port near Bandar Abbas before the war and during the US blockade, with far fewer vessels visible at its berths in the later image.

Shahid Rajaee is Iran’s most important export port and, after Imam Khomeini Port, its second-largest gateway for imports. It is also the country’s largest container port, handling nearly 80% of Iran’s container loading and unloading, according to official figures.

A similar pattern is visible at Imam Khomeini Port in southwestern Iran, the country’s largest import gateway, where satellite imagery shows markedly reduced vessel presence and terminal activity compared with the period before the conflict.

After

Before

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Copernicus satellite images from February 25, 2026 and September 5, 2026 show Imam Khomeini Port in southwestern Iran before the war and during the US blockade, with a marked decline in visible vessel and terminal activity.

The images provide a visual measure of the disruption at ports that are critical to Iran’s economy. Shahid Rajaee handles more than 55% of Iran’s imports and exports and an estimated 85% to 90% of its container trade, according to Iranian port data.

Imam Khomeini Port plays a particularly important role in imports of food and other basic commodities. Iran’s Ports and Maritime Organization said the port handled more than 48 million tons of cargo in the year ending March 2025, including 19.2 million tons of imported goods.

The satellite evidence reinforces other indications that the blockade is increasingly biting. Video published from Shahid Rajaee in late August showed no ships docked and little apparent loading or unloading activity.

Iran International reported in July that activity at the port had been reduced to a minimum, with thousands of containers stranded and about half of its workforce laid off.

Iranian officials have also increasingly acknowledged the economic impact. President Masoud Pezeshkian said in late August that blocked routes were preventing goods, including gasoline, from entering the country.

Reuters reported this week that Iranian trade had fallen by as much as 35% amid the blockade and intensified sanctions, while gasoline supplies had tightened sharply.

The effect has been even more pronounced on Iran’s oil trade. Iranian crude loadings fell from around 2 million barrels per day before the war to roughly 220,000–255,000 bpd in August, according to shipping data cited by Reuters.

Washington says the blockade can be sustained indefinitely. As of Aug. 23, US Central Command said its forces had redirected 70 commercial vessels attempting to breach it, while three had been disabled and two boarded.

Iran’s foreign trade has contracted sharply since the conflict with the United States began, with non-oil exports and imports falling by around a quarter or more, according to customs data released after months of delay.

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  Iran loses ground on trade as war hits oil and non-oil exports

Iran exported about $15 billion worth of non-oil goods, including natural gas and LPG, through August 16, nearly five months into the Iranian calendar year that began on March 21. That was nearly 30% below the figure reported for the first five months of the previous year.

Imports fell to about $17 billion over the same near-five-month period, about a quarter below the full five-month figure reported a year earlier.

The figures show a sharp deterioration in Iran’s trade during a conflict that has disrupted key industries and shipping routes, adding to an economy already struggling under years of sanctions, declining oil revenues and chronic shortages of foreign currency.

Iranian officials and state media have long portrayed control of the strategic waterway as a powerful bargaining tool, and many continue to do so.

But a warning from a commentator close to parliament speaker Mohammad Bagher Ghalibaf that Washington was trying to erode that advantage suggested the consensus may not be as solid as before.

“Targeting Iranian ships by the US, in response to Iran confronting any vessel that does not accept the route and arrangements determined by Iran for passing through the strait, is Trump’s dangerous method of reducing Iran’s control over the Strait of Hormuz,” Ali Gholhaki wrote on X on Thursday.

Without a new initiative from Tehran, he said, the United States could gradually “discredit the Strait card for Iran,” urging authorities to “devise a new plan.”

A card to play, not hold

Ghalibaf himself had hinted at this earlier.

“We should not turn the Strait of Hormuz to its opposite,” he said in a televised interview in June. “The Strait of Hormuz is valuable when traffic through it increases day by day, not when it decreases.”

The argument is not that Hormuz has no value, but that its greatest value may lie in the threat of disruption or its use as a short-term shock rather than prolonged restrictions that also damage Iran.

Journalist Arash Hashemi questioned whether that point had already been reached.

“Hasn’t the Strait card been without a payoff for some time? When we close the strait, they impose a blockade; and our own exports and imports decrease as a result, the value of our national currency falls, and everything else follows,” he wrote. “Does the Strait card still have any bargaining value?”

Reformist journalist Mohammad Sohofi similarly argued that closing the strait could work as a short-term shock to create leverage for a deal.

“Closing the Strait of Hormuz had value as a powerful blow and shock to the market, to shape an equation and conduct a deal,” he wrote, “but it was obvious from the beginning that continuing to use this card would turn it against itself.”

The concern is that the longer restrictions persist, the more Iran suffers from reduced trade while the United States and other countries have time to develop countermeasures.

Hardliners push back

Hardliners reject the suggestion that Iran is burning through its leverage, arguing that such claims risk weakening Tehran’s position.

“One of the most ridiculous and baseless things I have heard these days is that the Strait of Hormuz card will soon lose its value,” hardline commentator Alireza Taghavinia wrote on X.

“These are the same people who once claimed that Iran could never close it,” he added. “Some people would do better to remain silent and not break the morale of the people.”

The disagreement therefore turns less on whether Hormuz can impose costs than on whether Iran can sustain those costs long enough to extract political concessions without inflicting comparable damage on itself.

Searching for another weapon

The debate has gained another dimension from an unlikely source.

Kayhan editor Hossein Shariatmadari, who has advocated closing Hormuz to US, Israeli and allied shipping for years, has now proposed that Iran’s military and the Revolutionary Guards disrupt or sever international fiber-optic cables beneath the Persian Gulf and the Strait of Hormuz.

Shariatmadari argued that such action could be “many times more frightening and dangerous for the enemy” than keeping the strait closed.

Critics seized on the proposal as evidence that even proponents of maximum pressure were searching for additional leverage.

Journalist Hassan Abbasi warned that disrupting the cables would not hurt Iran’s adversaries alone, because the country’s own trade, banking, communications and digital economy depend on the same infrastructure.

That is increasingly the question running through the debate in Tehran: not whether Iran can impose costs through Hormuz, but how long it can do so before the weapon begins imposing comparable costs on Iran itself.

The Treasury Department said Golden Global Yatirim Bankasi and its asset-management and leasing subsidiaries had facilitated tens of millions of dollars in transactions for the Islamic Revolutionary Guard Corps-Quds Force and provided Iranian institutions with access to international banking channels.

The action was taken under Operation Economic Outcast, a campaign launched on August 24 to target financial networks and foreign institutions that Washington says help sustain the Islamic Republic’s economy and circumvent sanctions.

Treasury alleged that the Istanbul-based bank was established to help Iran’s shadow-banking network transfer oil revenues from China to Turkey, where money exchangers could convert the proceeds into cash and gold. It also accused Golden Global of knowingly offering correspondent banking services that enabled transactions through accounts controlled by the IRGC-QF and its proxies.

Golden Global rejected the allegations, saying it had complied with domestic and international banking and compliance requirements and had no direct or indirect dealings with the individuals and entities named in the US sanctions decision. The bank said it would pursue its legal rights over what it called unfounded allegations.

Iran International also contacted Golden Global for comment on the Treasury allegations and whether it planned to challenge the designation, but had not received a response at the time of publication.

The three entities were added to the Treasury’s Specially Designated Nationals list, blocking property and interests in property under US jurisdiction and generally barring US persons from transactions involving them. Treasury also issued a general license allowing transactions necessary to wind down dealings with the sanctioned entities.

Treasury Secretary Scott Bessent described the designation in an interview with America’s Voice News as “code for you are out of business” and said another bank could be sanctioned as soon as next week.

“We know who you are, you know who you are, it’s over,” Bessent said, adding that US allies were assisting the campaign.

The move comes a week after Washington targeted the UAE operations of Banque Misr, Egypt’s second-largest bank, using a different legal mechanism.

Rather than imposing a full OFAC designation, the Treasury’s Financial Crimes Enforcement Network proposed a rule under Section 311 of the USA Patriot Act that would prohibit US financial institutions from opening or maintaining correspondent accounts for Banque Misr UAE. The proposal is subject to a public comment process before it can be finalized.

Treasury estimated that Banque Misr UAE processed about $1.8 billion between January 2024 and June 2026 for 103 companies potentially linked to Iranian shadow-banking networks.

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  US crackdown leaves much of Iran’s shadow banking untouched

An Iran International investigation subsequently found that funds originating from Iran’s central bank were being directed to accounts at Banque Misr’s UAE operations as early as November 2022, based on leaked correspondence and transaction records from sanctioned Iranian lender Bank Parsian. The investigation found no evidence that the foreign banks involved knowingly facilitated sanctions evasion.

The Golden Global designation represents a further escalation from the Banque Misr action. Bessent told Reuters last week that Treasury expected to announce new secondary sanctions roughly every week, initially focusing on banks.

“You’re going to see a lot more of these every week,” he said. “We’re starting with the banks, and we’re telling the banks it’s not okay to have Iranian money and to aid the regime.”

The campaign marks an effort by Washington to move beyond already-sanctioned Iranian institutions and target the foreign financial infrastructure that US officials say allows Tehran to turn overseas revenues into money it can use.

When launching Operation Economic Outcast on August 24, Bessent said Washington’s objective was to “sever every economic lifeline” sustaining the Islamic Republic. He also appealed directly to Iranian soldiers facing economic hardship and invoked the fall of the Berlin Wall, when East German forces ultimately declined to fire on civilians.

Friday’s action also marked the first time a bank in a NATO member state had been targeted under the new campaign, according to Reuters, underscoring the widening reach of Washington’s effort as Treasury signals that further action against foreign banks is likely to follow.