Leaked Kremlin plan undercuts Moscow's claims on ruble-rial trade with Iran

The Treasury said the sectors provide important sources of revenue and logistical capacity and are intertwined with IRGC patronage, trade-based money laundering and sanctions evasion.

“The Iranian regime's ability to fund its war machine and inflict terror on the world has been severely diminished thanks to Operation Economic Outcast,” Treasury Secretary Scott Bessent said.

“Today’s action directly targets Iran’s enablers and lays the groundwork for the United States and our partners to drain the regime’s revenue once and for all.”

The automotive designations include Iran Khodro Company, SAIPA, Iran Khodro Diesel, Pars Khodro, Zamyad and Niroo Motor Shiraz.

Iran produced nearly 1.1 million vehicles in 2024, according to the International Organization of Motor Vehicle Manufacturers. Iran Khodro and SAIPA together account for more than 90% of the country’s domestic auto market.

The Treasury described the sector as a major remaining source of revenue for Iran and said Niroo Motor Shiraz had supplied more than 6,000 motorcycles for plainclothes intelligence agents working with the IRGC and Basij militia.

Foreign companies were also sanctioned for supporting Iran’s auto industry, including firms based in Indonesia, the UAE, Turkey and Hong Kong.

The Treasury said they supplied components to Iranian automakers or helped move parts into Iran, including shipments linked to Bahman Diesel, which it said produces vehicles for the Iranian armed forces and IRGC missile and drone units.

In the rail sector, the US government sanctioned the Islamic Republic of Iran Railway Company and Raja Passenger Trains Company, saying Tehran has increasingly relied on rail to move oil and sustain trade amid the US maritime blockade.

It also sanctioned Heavy Equipment Production Company (HEPCO) and its China-based subsidiary, saying HEPCO machinery has been used by the IRGC and Quds Force to build underground facilities and military training sites.

The metals sanctions targeted companies in the UAE and Germany over dealings with Iranian steel producers.

The Treasury also designated Ramin Keshvardoust and Mehnoosh Poursaraf Hamedani and companies tied to their steel and financial network in Iran, China and elsewhere.

The US government accused the network of facilitating tens of millions of dollars in Iranian steel and oil shipments and laundering transactions through Iran’s shadow banking system.

In a separate action Thursday, the Treasury targeted the Russia-linked A7 Network, describing it as a “shadow banking network” used by Iran to evade sanctions.

It said A7’s sub-agents formed a money-laundering and sanctions-evasion mechanism linked to Russian illicit finance that Iran used to move funds, including for oil sales and weapons procurement.

Operation Economic Outcast was launched in August to cut off Iran’s remaining sources of revenue and expand sanctions pressure beyond oil into industrial sectors that Tehran still relies on for trade, logistics and foreign currency.

The Treasury says the campaign is designed to isolate companies and financial channels that help Iran move funds, sustain industrial production and circumvent US restrictions.

Data from commodities intelligence firm Kpler shows that regional crude exports reached their highest level since the war began in late February.

Average crude exports stood at around 16.5 million barrels per day in September, but the seven-day average rose to around 19.5 million barrels per day in the final week of the month, surpassing the pre-war level of approximately 17 million barrels per day.

By contrast, Iran has not loaded any new oil at its terminals since mid-August, while no Iranian oil cargo has crossed the US blockade line since mid-July. Data from tanker-tracking firm TankerTrackers also points to a halt in new Iranian crude shipments.

Homayoun Falakshahi, a senior analyst at Kpler, told Iran International that the halt in loadings has forced Iran to cut oil production to roughly the level required for domestic consumption, around 1.8 million barrels per day—roughly half its pre-war output.

Iran’s oil exports

Kpler data, seen by Iran International, shows that since mid-July, no Iranian oil cargo has crossed the blockade line and travelled through Asian waters toward China.

Iran continued loading oil for several weeks and, by mid-August, had stored around 67 million barrels aboard tankers anchored in its southern waters. But as access to empty tankers became increasingly limited, new loadings also came to a halt.

TankerTrackers data indicates that Iran’s oil terminals were effectively inactive in terms of crude loadings throughout September.

As of last week, around 15 million barrels of Iranian oil remained on the water in Asian waters. Falakshahi said most of those cargoes had already been sold, meaning Iran effectively has no new oil available for delivery to Chinese buyers.

China is the only major buyer of Iranian crude and purchased an average of around 1.5 million barrels per day from the Islamic Republic over the past year.

Iran also exported around 500,000 barrels per day of oil products and liquefied petroleum gas (LPG) last year to buyers including the UAE, China and other Asian countries. Those flows have also stopped since the start of the naval blockade.

Arab oil exports recover

By contrast, Arab countries in the region have restored much of their oil exports and established alternative routes for transporting crude.

Kpler says their crude exports averaged at least 16.5 million barrels per day in September, roughly matching their pre-war average. In the final week of the month, however, exports rose substantially further.

Before the war, nearly 17 million barrels per day of crude and 6.3 million barrels per day of oil products from Iran and Arab countries in the region, including Oman, were shipped to global markets through the Strait of Hormuz, the Gulf of Oman and the Red Sea—a combined 23.3 million barrels per day.

In the final week of September, crude exports from these countries reached nearly 19.5 million barrels per day, above the pre-war level. Oil-product exports, however, stood at around 3 million barrels per day, less than half their pre-war level.

Overall, crude and oil-product exports from the region reached more than 22.4 million barrels per day in the final week of September, just 900,000 barrels per day below the pre-war level.

The comparison is particularly striking because Iran accounted for around 2 million barrels per day of crude and oil-product exports before the war. Excluding Iran, exports from Arab countries in the region have therefore risen above their pre-war level, largely offsetting the disappearance of Iranian supplies from the market.

OPEC data shows that the UAE, which left the group in May, increased oil production to more than 3.8 million barrels per day in August—around 700,000 barrels per day above its pre-war level.

No new data has yet been released on UAE oil production in September. The country has production capacity of close to 5 million barrels per day.

Foreign Minister Abbas Araghchi, speaking before leaving New York on Tuesday, rejected suggestions that Tehran had agreed to nuclear concessions, saying Iran’s immediate focus was the Strait of Hormuz.

Despite Trump’s rejection of the Iranian proposal, Araghchi said he had told Qatari mediators that Tehran would wait for an official US response through them.

The reformist newspaper Shargh said Araghchi’s remarks carried an important message: Tehran did not want its return to diplomacy to be interpreted in Washington as a retreat from its nuclear positions.

The dispute is increasingly about whether that diplomatic opening can produce an agreement before pressure gives way to another round of escalation.

An opening, but on whose terms?

President Masoud Pezeshkian reiterated on Wednesday that his government was seeking to bring the Islamabad understanding to fruition. He did not comment directly on Trump’s rejection of Iran’s proposal.

Parliament Speaker Mohammad-Bagher Ghalibaf, meanwhile, responded sharply to Trump’s recent statements, warning that Iran would retaliate against further military action.

“In a region where we do not sell oil, no one will sell oil, and if our security is not ensured, no infrastructure will be safe,” he said.

“The main issue in the coming days will not be whether Iran and the United States are talking to each other, but whether they can move from exchanging messages to an implementable formula,” Shargh wrote.

It said a US response meeting at least some of Tehran’s conditions could lead to more serious negotiations, while failure to find such a formula would return the dispute to “a logic of pressure and confrontation.”

Etemad, another reformist daily, raised a different concern: that the Strait of Hormuz could lose value as an Iranian bargaining tool the longer the confrontation continues.

It argued that if the blockade, restrictions on Iranian oil exports and pressure on Iran’s commercial networks become entrenched, Washington could increasingly rely on economic pressure rather than further large-scale military action.

Former Iranian diplomat Kourosh Ahmadi made a similar argument in Shargh, saying Iranian officials should recognize that “diplomacy is an arena of give-and-take” rather than expect progress while offering almost no concessions.

Trump’s rejection of Tehran’s proposal, he argued, showed that the dispute was increasingly about “who sets the negotiating ground and who will be forced to put more concessions on the table to get out of pressure.”

If diplomacy fails

Hardline voices have pushed in the opposite direction, warning officials against interpreting continued diplomacy as evidence that Iran should compromise.

Political analyst Mehdi Kharatian rejected arguments that the Strait of Hormuz was losing its effectiveness as leverage.

“Do not be deceived by those who these days are flooding you with false and biased reports about the ineffectiveness of oil and the Strait,” he wrote, accusing such voices of implicitly advocating surrender to the United States.

He also warned officials against sending what he described as excessive signals of willingness to negotiate, arguing that doing so could encourage Trump to resume military action.

The possibility of another confrontation was also raised by IRGC spokesman Hossein Mahdavi, who told state television that Iran was already at war. He said the United States was unlikely to launch attacks on the same scale or with the same capabilities as before.

But he added: “In the world of war, everything is possible.”

Mahdavi also claimed Iranian forces continued to target vessels attempting to transit the Strait of Hormuz and that the United States had recently refrained from responding.

The conservative Khorasan newspaper raised the possibility of Iran launching pre-emptive attacks if negotiations over the nuclear issue fail.

It argued that Iran could resort to a “Plan B” aimed at seizing the initiative before its adversaries complete their intelligence and logistical preparations, potentially triggering a period of intensified warfare before the US midterm elections.

The competing prescriptions emerging in Tehran reflect a debate that has moved beyond whether communication with Washington should continue. What the opposing camps increasingly share is a sense that the current diplomatic opening may not remain open indefinitely.

The response was reportedly delivered through Qatar and has been described as US “feedback” rather than acceptance or rejection of the Iranian plan.

Hardline voices have portrayed Washington’s position as evidence that further diplomacy is futile, while more pragmatic commentators argue that the fact the US responded at all shows negotiations remain alive.

President Donald Trump had publicly dismissed Iran’s proposal as insufficient. Iranian diplomats said reopening the Strait and lifting the naval blockade were discussed in indirect talks mediated by Qatar.

The dispute in Tehran is increasingly about what it should do next.

Jame Jam, affiliated with state television, published an op-ed Wednesday by hardliner Abbas Salimi-Namin titled “America’s Fear of Admitting Defeat Against Iran.”

Salimi-Namin argued that Washington’s resistance to the seven-point plan, rooted in the earlier Islamabad talks, reflected the White House’s unwillingness to acknowledge that framework as a strategic setback.

US policymakers, he wrote, still cling to the prospect of delivering a “crippling blow” to Iran and fear the domestic political cost of acknowledging failure more than continued escalation.

Kayhan went considerably further.

Editor-in-chief Hossein Shariatmadari portrayed US demands for verifiable nuclear concessions as evidence that Washington never intended to negotiate in good faith.

He argued that linking freer navigation through the Strait to nuclear concessions was an attempt to strip Iran of its principal leverage while maintaining US economic and military pressure.

Kayhan criticized what it described as the Foreign Ministry’s excessive “patience” and called for non-attributable maritime interdictions, deployment of coastal anti-ship batteries and expanded targeting of Western-escorted vessels.

Global energy markets, it argued, must face an “unbearable cost” before Washington lifts its blockade.

The moderate daily Sharq offered an almost opposite prescription.

In a commentary, Ahmad Zeidabadi argued that despite the rigidity of the US response, Washington’s decision to send detailed feedback through Qatar showed that a diplomatic off-ramp remained open.

He urged the government to preserve the Qatari channel and proposed a two-stage approach under which Iran could offer targeted technical assurances, including temporary IAEA monitoring protocols, in return for an immediate, phased easing of restrictions on commercial transit under the Islamabad memorandum.

Zeidabadi rejected calls for military escalation, warning that abandoning shuttle diplomacy as restrictions on Iranian aviation and banking intensify would push the country towards deeper economic and civilian isolation.

The contrasting reactions show how Washington’s response has shifted the argument in Tehran from whether diplomacy should continue to what price Iran should be prepared to pay for it.

Jame Jam occupies a space somewhere between the positions represented by Kayhan and Sharq: deeply skeptical of Washington’s intentions, but portraying the impasse as a product of US reluctance to acknowledge Iran’s leverage rather than as grounds for immediately abandoning negotiations.

With an actual US response now before Tehran, those competing interpretations are no longer arguments about a hypothetical deal. They are becoming arguments over how Iran should answer.

Rasaei said during an online parliamentary session on Sunday that Ghalibaf, former president Hassan Rouhani, President Masoud Pezeshkian and the Secretariat of the Supreme National Security Council had filed complaints against several lawmakers.

He said one of those complaints had resulted in a 10-month prison sentence against him. Rasaei described the ruling as “non-legal” and “political,” but said he would report to prison to serve the sentence.

Rasaei was elected third in Tehran in the parliamentary election three years ago, when around 80 percent of eligible voters in the capital boycotted the election.

He is the first sitting lawmaker to be sent to prison during his term in office.

The complaint dates to before Rasaei was elected to parliament and concerns a case brought by Ghalibaf against the weekly 9 Dey, where Rasaei was managing director. The complaint followed an article published in January 2024 under the headline “Ghalibaf’s Manipulation of Parliamentary Documents.”

The judiciary announced on Monday that Rasaei had appeared at Tehran’s Special Clerical Court and was sent to the clerics’ section of Evin Prison the same day to begin serving his sentence. According to the judiciary’s statement, Rasaei had more than 18 months to resolve the case by apologizing to Ghalibaf.

Rasaei’s positions are closely aligned with those of the Paydari Party and former nuclear negotiator Saeed Jalili.

Hardliners react to the sentence

Rasaei’s supporters have accused Ghalibaf of “silencing the voices of critics” and criticized him for pursuing the complaint against Rasaei rather than focusing on the country’s economic and security problems.

Figures associated with these groups and their media outlets also attacked Mohseni-Ejei. The criticism has spilled over into some recent nightly pro-government gatherings.

Mohammad-Manan Raeisi, a Qom lawmaker who headed Saeed Jalili’s presidential campaign in the city two years ago, sharply criticized Ghalibaf and other officials and warned of a possible popular backlash against them.

“I doubt that, under these circumstances, people will allow you to appear in any mosque, gathering, public square or religious ceremony, and you may face a popular backlash,” he wrote.

Meysam Nili, managing director of the Raja News website and a figure associated with the Paydari Party, accused the judiciary of injustice and political bias, claiming that a “coup” was being organized against media and political figures belonging to the faction.

Hardline social media user Mohsen Maghsoudi, referring to arguments in favour of negotiations with the United States, wrote: “When it is possible to negotiate with the killer of the martyred Imam (Ali Khamenei) in the national interests and still talk about negotiations despite receiving insult, humiliation and aggression, why can’t we, in order to preserve unity, drop a three-year-old complaint over the headline of a weekly newspaper so that a revolutionary representative does not go to prison and hundreds of thousands of people’s votes do not become ineffective for 10 months?”

Other conservatives push back

Other conservative figures have sharply criticized the controversy generated by Rasaei’s supporters and the hardline groups.

The IRGC-affiliated Tasnim news agency published an article headlined “On Mr Rasaei’s Strange Fallacies!” and described his objections to the ruling as “slander against a judicial ruling.”

Tasnim said Rasaei had effectively challenged the validity of the ruling by describing it as “strange” and “contrary to procedure,” while accusing the judiciary of political conduct by calling the ruling “political and non-legal.” The agency characterized his statements as criminal.

The Tabnak website published a video showing hardliners chanting in support of Rasaei and against Ghalibaf at one of the nightly gatherings. It called them “infiltrators” and said a small number of people were using the gatherings to “advance factional objectives.”

The conservative Khorasan newspaper said Rasaei’s refusal to apologize had led the court to conclude that he was not only unrepentant about the allegations he had made against Ghalibaf, but was also refusing to resolve the case and defying a judicial order.

Mojtaba Zarei, a member of parliament’s National Security and Foreign Policy Committee, wrote that turning a judicial case into a political and media confrontation during wartime would only deepen divisions among political forces.

Deepening confrontation

Hardliners have stepped up attacks in recent days against political rivals who support resolving the dispute with the United States through negotiations and returning to the Islamabad understanding.

They have gathered outside the home of former President Hassan Rouhani, whom they accuse of being subservient to the West, and called for him and his former foreign minister, Mohammad-Javad Zarif, to be prosecuted.

They also chanted against President Masoud Pezeshkian and called him an “infiltrator” as he returned from New York, where he attended the UN General Assembly. Hardliners have also registered an impeachment motion against Foreign Minister Abbas Araghchi over his meeting with Steve Witkoff, US President Donald Trump’s special envoy for Iran, and launched an online campaign calling for Pezeshkian’s removal.