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ARTICLE · 26 AUGUST 2026

A New Sanctions Landscape In The Middle East

The U.S. Treasury's Office of Foreign Assets Control has launched "Operation Economic Outcast," expanding secondary sanctions on Iran while simultaneously removing Syria's State Sponsor of Terrorism designation. These contrasting moves signal a strategic shift in Middle East policy, with Syria emerging as a potential alternative trade corridor to bypass the Strait of Hormuz as Iran faces intensified economic isolation.

GlobalInternational Law

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) followed President Donald Trump's warning of an "Economic D-Day" on Iran with the August 24, 2026, implementation of additional sanctions designed to "sever the economic lifelines that sustain the Iranian regime and the Islamic Revolutionary Guard Corps (IRGC)." Although the number of new sanctions paled in comparison to the "maximum pressure" campaign initiated last year, the new measures provide a "warning shot" to third countries that continue to deal with Iran.

At the same time, the U.S. Department of State removed Syria's designation as a State Sponsor of Terrorism (SST) and revoked the designation of the al-Nusrah Front, also known as Hay'at Tahrir al-Sham (HTS), as a Specially Designated Global Terrorist (SDGT) organization – signaling that even the most robust economic restrictions imposed by the United States can be removed. After comprehensive sanctions on Syria were revoked in 2025 following

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