US insists Iran conflict is not a war while economic blockade tightens

US Treasury Secretary Scott Bessent on Thursday (local time) said that the European Union has "officially joined" the US-led "Operation Economic Outcast" against Iran, welcoming what he described as the bloc's strong and early stance in maintaining economic pressure on Tehran as the West Asia conflict continues.

"The European Union has officially joined Operation Economic Outcast and we appreciate their strong and early stance," Bessent said in a statement on X.

"The United States stands firm with our allies in ensuring the murderous Iranian regime cannot exploit the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies. The world is sending a clear message to the Iranian regime: We will not stop until every remaining financial lifeline has been severed," he added.

Bessent's remarks came after the EU said it was prepared to support additional economic pressure on Iran, including through the US-led operation, while stressing the need for continued diplomatic efforts and de-escalation.

"The European Union has consistently urged Iran to curb its nuclear programme, and its ballistic missile programme, refrain from destabilising activities in the region and in Europe, stop its military support for Russia's war of aggression against Ukraine and cease the violence and repression against its own people," the EU said in a statement shared by Bessent.

The bloc said it believes continued diplomatic efforts are necessary to reach a peace settlement, restore regional stability and ensure "full freedom of navigation and safe transit through the Strait of Hormuz".

The EU also said it had already adopted extensive sanctions aimed at preventing Iran from exploiting the global economy and financial system to sustain what it described as hostile actions and undermine international security.

"It remains ready to take further measures, where necessary, to safeguard its security and interests, including freedom of navigation through the Strait of Hormuz," the EU said.

The bloc welcomed efforts aimed at ensuring Iran ceases its destabilising activities and engages in peace negotiations "with good faith", adding that this could include additional economic pressure through Operation Economic Outcast.

"The EU will continue to work closely with the United States and other G7 and international partners to maintain pressure on Iran and contribute to de-escalation and regional stability," it said.

US Secretary of State Marco Rubio delivered a blunt defence of the Trump administration’s “America First” economic agenda, arguing that decades of "globalisation" left the United States dangerously dependent on foreign countries for goods essential to its economy and national security.

“The nation states still does matter. National still matters. National borders still matter!” Rubio said. In saying that America "lost our ability to make things", Rubio declared globalisation’s era over. He said the US made a “terrible mistake” after the Cold War by deciding that it no longer mattered where goods were produced, as long as they were made as efficiently and cheaply as possible.

Iran has accused the US of committing a war crime after a US strike hit a private home in southern Iran where a wedding celebration was taking place, killing four people, including two children, and wounding dozens.

The Iranian Red Crescent said the victims included two women and two children, aged 4 and 16. At least 68 people were wounded, according to Iranian state media and emergency officials. A local official earlier reported five deaths, but Iranian authorities later revised the toll to four.

The strike took place in Kuhestak, in Sirik County in southern Iran, near the strategic Strait of Hormuz. Iranian officials said the building was a residential property where a family was celebrating a wedding. Iran's Red Crescent has called for an international investigation, including an inquiry by the International Criminal Court, arguing that the attack killed civilians at a private gathering.

The US has not acknowledged that the wedding was deliberately targeted. Vice President JD Vance said the incident was being investigated and maintained that the United States does not intentionally target civilians. He also questioned some Iranian accounts of the incident, adding he was "extremely sceptical" over alleged strike on the wedding. The episode has nevertheless raised difficult questions about the conduct of US military operations in Iran, particularly because the strike occurred in a civilian area.

Iranian crude exports have fallen from roughly 1.7 million barrels a day to about 260,000 barrels a day as the US blockade restricts tanker movements and undermines Tehran's ability to reach its principal market, China.

A Reuters report found that Iranian crude loadings had collapsed from roughly 2 million barrels per day in March to only 220,000–255,000 bpd in August.

That matters enormously because oil remains one of Tehran's most important sources of hard currency.

For years, Iran managed to keep oil flowing despite US sanctions by relying on a sophisticated sanctions-evasion ecosystem: so-called "shadow fleets", ship-to-ship transfers, disguised cargoes, opaque ownership structures and alternative financial channels.

The US Navy's blockade of Iranian ports changes the equation. While sanctions make Iranian oil difficult to sell, a naval blockade makes it physically difficult to move.

The Iranian rial has not only become just a symbol of the crisis but is a major pressure point affecting the locals.

With the rial falling to record lows against the US dollar, it makes imported food, medicine, machinery and industrial inputs increasingly expensive, creates a "vicious cycle" for an economy already suffering from years of sanctions and structural weaknesses.

Maritime security risks remained “severe” across the Middle East maritime region, with Iran continuing to monitor and harass commercial shipping around the Strait of Hormuz, according to a regional maritime security advisory.

The Joint Maritime Information Center (JMIC) based in Bahrain, said in Advisory No. 093, issued at 0315 UTC on Sept. 3 (7.15pm Gulf), that its regional threat level remained at "severe".

The assessment covered the previous 48 hours and highlighted continued military activity, navigation-system interference and reduced commercial traffic through the strategic waterway.Iran continues surveillance and harassment

The JMIC said attacks, attempted attacks and harassment by Iran's Islamic Revolutionary Guard Corps persisted around the strait.

Commercial traffic through the Strait of Hormuz showed a modest increase from recent lows but remained well below normal levels, according to the JMIC.

Independent vessel-tracking data showed single-digit numbers of vessels transiting the strait in both directions during the period covered by the advisory.

US Naval Cooperation and Guidance for Shipping, or NCAGS, data gave a somewhat higher figure, showing an average of more than 20 vessel transits a day during the previous week.

The differing figures reflect the use of different tracking and reporting systems, but both point to the same conclusion: commercial shipping remains heavily suppressed.

No confirmed attacks or disruptions were reported in the Arabian Gulf during the 48-hour period, the JMIC said.

Traffic flows remained stable and congestion at anchorages was largely unchanged. The JMIC said wider military activity also warranted caution from commercial operators.

Iran’s economic defences, built over years to withstand sanctions, are showing serious signs of failure as a US naval blockade, expanded financial restrictions and the collapse of oil exports deprive Tehran of the foreign currency it needs to keep trade and basic imports moving, Reuters reported.

The pressure is now reaching a level that even Iranian officials are publicly acknowledging. President Masoud Pezeshkian has said Iranian exports and imports have fallen by about 35% because of US sanctions and the maritime blockade.

At the same time, Iran's inflation is approaching 70%, while the rial has plunged to record lows.

The result is a potentially dangerous economic feedback loop: fewer oil exports mean fewer dollars; fewer dollars make imports more expensive; higher import costs push inflation higher; and inflation further weakens household purchasing power and confidence in the rial.

President Donald Trump assailed media reports about strained American munitions stockpiles, and threatened further US strikes against Iran “any time we want”. In a post on his Truth Social platform, Trump said the United States had “virtually unlimited amounts of Mid to High Grade Ammunition, far more than we could ever use for this, or for any other War (which is highly unlikely!), that could improbably take place.”.

The message came after the latest US attacks on Iranian targets near the Strait of Hormuz and Iranian retaliation against US-linked facilities in the region.

US Vice President JD Vance said Thursday he would not categorize the Iran war as a war, despite continuing clashes with Tehran six months after the start of the conflict.

Vance's comments came amid growing signs that President Donald Trump is trying to draw a line under the conflict that has bogged down his administration.

"I wouldn't call it a war. Right now, there is no active shooting," Vance told a White House briefing when asked if the war would be over by US midterm elections in November.

Vance added that "I recognize there have been places where this has flared up" but said major combat operations only lasted for six weeks after the US-Israel war started on February 28.

"But when you ask when will this end, you're asking me a question like when will the Iranians stop shooting at ships? I think the reality is I don't know the answer to that question. You would have to ask the Iranians," he said.

Day 183: Trump boasts ‘unlimited’ US ammo, warns of more strikes

Day 182: US strikes on Iran would not continue 'too long': Trump

Day 180: Trump warns of more strikes on Tehran

Day 179: UAE strongly condemns missile attacks on Jordan

Day 178: Iran supreme leader calls for unity among Muslim countries

Day 177: 82 ships redirected under US blockade