Iran sanctions threaten RM1.8bn in Malaysian trade
Treasury Secretary Scott Bessent warned on Monday that Washington will impose sweeping new sanctions on Iran, escalating pressure on global firms to cut all ties with Tehran or face U.S. penalties.
Source: Associated Press · August 24, 2026 at 7:31 PM · AI-assisted report
Single-source
SINGAPORE, 25 AUGUST 2026 —
Treasury Secretary Scott Bessent warned on Monday that Washington will impose sweeping new sanctions on Iran, escalating pressure on global firms to cut all ties with Tehran or face U.S. penalties.
Market Impact
Bessent told reporters in Washington that the administration would “level-set” with every country over Iran, adding that secondary sanctions would target any nation continuing to trade with the Islamic Republic. He gave no details on timing or targeted countries but said President Donald Trump has personally pressed world leaders to sever commercial links with Iran.
China, Turkey and the United Arab Emirates are Iran’s largest trade partners, according to regional data. Days before the announcement, the UAE suspended all trade, commercial exchanges and financial transactions with Iran after a reported missile strike on Emirati territory. Bessent called the UAE move “not a coincidence,” and said Trump’s phone diplomacy had already yielded results.
The rial fell to 2.02 million per U.S. dollar on Monday as markets opened, breaching a record low set during six months of war with Israel. Before the Feb. 28 conflict began, the currency was under strain from double-digit inflation and negative growth. The IMF now forecasts Iran’s GDP will shrink more than 5% this year.
Food prices have surged since the war started: rice is up about 60% and beef more than 150%. In Tehran, retiree Sadegh Mahmoudi queued to convert his savings into dollars, saying, “There is no hope for a deal and peace.”
Bessent’s warning came as Iran’s regional influence grows. Attacks on shipping in the Strait of Hormuz have choked traffic, halting roughly one-fifth of the world’s seaborne oil trade. Iran now insists on charging tolls for vessels passing through the strait and is close to a deal with Oman for joint management of the waterway.
Pakistan sent a high-level delegation to Tehran on Monday, including Army Chief Field Marshal Asim Munir, to urge both sides back to negotiations. The visit follows a June ceasefire brokered by Islamabad and a call between Trump and Munir ahead of the trip, according to a person familiar with the discussion.
Iran’s parliamentary Speaker Mohammad Bagher Qalibaf dismissed the new U.S. measures, posting on X that Iran’s partners “don’t take these statements into account anywhere.” He has led Iran’s negotiation team for the past six months.
Malaysia’s exposure to Iran is modest but not negligible. Bank Negara Malaysia data show Malaysian banks’ claims on Iranian counterparties stood at RM1.8 billion in the first quarter, largely trade-related credit. Petronas has no upstream operations in Iran at present, and national shipping line MISC has not routed vessels through the Strait of Hormuz since the war began.
Nonetheless, the latest U.S. move increases compliance risk for Malaysian firms active in the Gulf, especially those with dollar-clearing operations, according to a risk advisory note from CIMB Research seen by the Malaysian business desk.
Related: Petronas · Singapore