The U.S. Treasury Department announced sanctions on 10 people and entities accused of procuring weapons and components for Iran’s defense ministry as it fights its seven-month war against the United States. The targets are based in Iran, Hong Kong and Pakistan. The move forms part of the Trump administration’s “Operation Economic Outcast” campaign, which aims to sever “critical financial lifelines” for the Iranian government.
Military Supply Chain and Negotiations
Iranian officials said Wednesday they had received an official U.S. response to Tehran’s latest proposal to end the war. They didn’t say what it contained or whether Washington had rejected the offer. Iranian Foreign Minister Abbas Araghchi presented it to President Masoud Pezeshkian at a Cabinet meeting, government spokesperson Fatemeh MoHajjerani told the state-run IRNA news agency.
“We will make every effort to bring the agreement to fruition and will firmly stand up for the rights of the Iranian people,” Pezeshkian said. “The agreement must now be based on a win-win strategy.” Araghchi had returned from New York, where he attended last week’s UN General Assembly and held indirect talks with U.S. officials. He also met Qatari and Pakistani mediators on the sidelines of the gathering.
Araghchi briefed the Cabinet on Iran’s conditions for reopening the Strait of Hormuz, which MoHajjerani said mediators had received. Last week, Araghchi said he had proposed reopening the strait within a week if the United States lifted its blockade of Iranian ports, released frozen Iranian assets and waived sanctions on Iranian oil sales, among other conditions.
President Donald Trump publicly rejected the proposal days earlier. Iran wanted a deal because it was “losing so badly,” he said, adding that the offer “would not be acceptable.” Officials said mediators continued working with Iran and the United States to try to broker an agreement to end the fighting and open the strait. They spoke on condition of anonymity because they weren’t authorized to comment publicly.
Economic Pressure and Domestic Unrest
Iran’s economy faced heavy strain before the war and has been in free fall since the conflict began in late February. The rial fell to a record low on Tuesday, with traders in Tehran exchanging more than 2.5 million rials for one U.S. dollar. Its previous record low, 2.2 million to the dollar, came on Sept. 2, 27 days earlier.
Medication prices have soared, and some treatments have become hard to find as the U.S. blockade and stepped-up sanctions squeeze the pharmaceutical industry. Some medicines have more than tripled in price. Food and other goods have also become much more expensive as unemployment has risen and the currency has lost half its value. Iran has sought to push global energy prices higher with attacks on regional oil-shipping routes; the United States has blockaded Iranian ports since June and imposed increasingly tough sanctions.
Two men were executed in Iran on Wednesday over their role in violence during nationwide anti-government protests in January, IRNA reported, citing the judiciary. The men took part in unrest in Mashhad that left four members of the security forces dead, the report said. Iran’s Supreme Court upheld their death sentences. The protests began Dec. 28 amid anger over the collapsing currency and worsening economy, then spread as demonstrators increasingly called for the overthrow of the Islamic Republic. Iranian authorities responded with a deadly crackdown. Rights groups say thousands were killed and tens of thousands arrested; Iranian authorities have reported a substantially lower death toll.
Oil Markets Track the Talks
Oil prices were nearly flat in early Asian trading Thursday, Oct. 1, as investors assessed U.S.-Iran talks and the outlook for Middle Eastern crude exports. Brent crude futures rose 12 cents, or 0.1%, to $98.15 a barrel by 0045 GMT. U.S. West Texas Intermediate crude fell 7 cents, or 0.1%, to $90.35.
Brent gained around 14% in September, its biggest monthly increase since July, while WTI rose about 5%. “Although buying continued amid supply concerns as peace talks stalled, selling pressure also prevailed as Middle Eastern oil exports showed signs of recovery,” said Toshitaka Tazawa, an analyst at Fujitomi Securities. He cited Saudi Arabia’s resumption of exports from its Red Sea port of Yanbu.
Goldman Sachs estimated Gulf oil exports, including “dark exports” involving ships with location transponders turned off, had recovered to 23.3 million barrels per day over the previous week, in line with their 2025 average. Saudi Arabia resumed oil-tanker loadings from Yanbu on Tuesday after restarting operations on its East-West Pipeline.