President Donald Trump on Friday signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, a law expanding existing sanctions and granting the White House new tariff powers to penalize foreign entities engaged with Iran’s oil trade. The legislation reinforces the Treasury Department’s ongoing Operation Economic Outcast, a campaign targeting financial networks used by Iran to smuggle oil and evade international restrictions.
The signing follows seven months of naval conflict in the Strait of Hormuz, which began after the blockade of the strategic waterway. The administration has framed the economic measures as a tool to weaken Iran’s regional influence and nuclear capabilities without direct military escalation. Critics argue the sanctions risk exacerbating regional instability by tightening economic pressure on civilians.
Operation Economic Outcast targets financial intermediaries, shipping companies, and foreign banks facilitating Iran’s oil exports, including those in China, Syria, and Venezuela. The Treasury Department has identified over 40 entities linked to Iran’s oil smuggling networks since the campaign’s launch, with sanctions imposed on Chinese firms in May for alleged support to Iranian military operations.
The new law grants the president authority to impose tariffs of up to 50% on any country found to be undermining sanctions, a provision aimed at deterring trade partners from circumventing restrictions. The White House has not indicated whether additional measures will be announced during the upcoming United Nations General Assembly, where global leaders will convene in New York.
Analysts note the sanctions come amid reports of declining Iranian oil exports, which fell by an estimated 15% in the first half of 2026 due to enforcement actions. However, Iran has continued to supply its regional allies, including the Houthis in Yemen, who resumed attacks on Saudi-linked shipping in July. The Houthis’ offensive near Bab al-Mandeb has drawn military support from Britain, which announced assistance to Saudi Arabia this week.
The administration’s approach contrasts with calls from some lawmakers for a decisive military strike to dismantle Iran’s nuclear infrastructure. Supporters of the sanctions argue they provide a measured alternative to conflict, while opponents contend the measures have failed to curb Iran’s regional aggression. The Treasury Department has not provided updated figures on the impact of sanctions since the new law’s passage.
The United Nations General Assembly convenes next week, where Iran’s nuclear program and regional activities are expected to dominate discussions. The Trump administration has not signaled whether it will pursue further diplomatic or economic actions during the event.