The administration of President Donald Trump is right to wage economic war on Iran. Operation Economic Outcast is the correct strategy to starve the Iranian regime of the revenues it needs to fund its proxies, missiles, nuclear activities, and war against the U.S. in the Strait of Hormuz. Treasury Secretary Scott Bessent’s declaration of the “full might” of the U.S. government to prevent other nations from continuing to conduct business with Iran is the kind of tough language needed — and it must be backed up.
But right now, there is a back door to close. And thus, all of this may become a very expensive photo opportunity.
The UAE is the leak in the dam
These developments have unfolded as the UAE, on Aug. 19, announced that it would “cease all trade, commercial exchanges, and financial transactions with Iran until further notice.” Note the caveats — “until further notice” — which implies that a policy so profoundly antagonistic to Iranian trade will not be implemented overnight. Furthermore, given the deep-rooted financial and commercial relationships which have developed between the Emiratis and Iranians over generations, effectively unplugging the Iranian economic machine from Dubai will require a demolition-style effort.
The UAE is Iran’s second-largest trading partner. Dubai is a transshipment hub and the nerve center of Iran’s shadow banking system. For generations, Iranian merchants, money changers and front companies have established roots in the economies of the Emirates. Unplugging this financial ecosystem from the local economy would be a project requiring years to execute.
According to the Washington Institute for Near East Policy, the UAE is the primary back door through which sanctioned Iranian goods, dollars, and oil revenues flow into the global economy. Treasury’s Operation Economic Outcast designations hit several UAE-based entities on day one — that’s a start. But blunt-force designations alone won’t sever centuries of Iranian financial plumbing running through the Gulf. Trump is reportedly personally contacting world leaders — right instinct. The question is whether the follow-through matches the rhetoric.
To be frank, it will be extremely difficult to expect the UAE to fully comply with American demands. The two countries have economies that are interwoven and will take a generation to unravel. De-coupling them requires an economic restructuring plan that Abu Dhabi and Dubai have neither the political will nor the financial incentive to implement on America’s timeline.
Whether or not there is significant sanctions-busting occurring is not the real question. What we should be focused on is what we intend to do about it.
China has upgraded its game
If the UAE is the back door, China is the freight elevator.
The House Select Committee on China’s investigation — Crude Intentions: How China Became the Clearing Market for Sanctioned Oil — documents how Beijing uses shadow fleet tankers, at times crewed by military and intelligence personnel, to hoover up tens of millions of barrels of Iranian crude at deep discounts. China isn’t just buying oil. It is running a sophisticated, state-directed sanctions evasion infrastructure operating at the level of industrial-scale financial warfare.
Iran’s shadow fleet operates aging tankers that turn off tracking signals, broadcast false locations, and conduct ship-to-ship transfers in international waters. This isn’t freelance smuggling. China is the anchor buyer that makes the whole system viable. As long as Beijing keeps writing the checks, Tehran keeps the lights on — regardless of what happens in Dubai.
Europe, too, has launched its own payment vehicle specifically designed to circumvent U.S. sanctions architecture. We are not merely fighting Iran. We are fighting a global workaround economy that has had years to mature.
What a winning strategy looks like
None of this means sanctions can’t work. It means they can’t work the way they’re currently structured. Here is what getting to a good outcome actually requires.
First, secondary sanctions must be applied — and applied to allies, not just adversaries. Turkey, India, and the UAE all need to understand that access to the U.S. financial system is not compatible with facilitating Iranian oil revenue. The administration has the legal authority. It needs the political will.
Second, the UAE needs a face-saving off-ramp. Abu Dhabi cannot publicly eviscerate its own economy overnight. It needs technical assistance, financial incentives, and intelligence support to systematically dismantle the Iranian front company networks operating on its soil. This is a relationship management challenge as much as a sanctions enforcement challenge.
Third, China must face real costs — not press releases. The Select Committee investigation gives the administration everything it needs to sanction specific Chinese entities, specific vessels, and specific financial institutions participating in Iranian crude purchases. Use it.
THE MULLAHS CELEBRATED 9/11. WHY IS TRUMP STILL BEGGING THEM FOR A PHOTO OP?
The Trump team has the right goal. The maximum pressure framework is the right framework. But pressure only works when every valve is closed. Right now, the biggest valves are wide open — and Tehran knows it.
Close the back door. Then watch the regime crack.
L. Todd Wood is a former special operations helicopter pilot, graduate of the U.S. Air Force Academy, geopolitical analyst and a writer, publisher and journalist.