Bessent: Iran “cannot pay its soldiers” as “Operation Economic Outcast” cuts funding to the Houthis, Hamas and Hezbollah

US Treasury Secretary Scott Bessent argues that the economic strangulation of Iran now reaches the payroll of the regime’s soldiers. In the early hours of Friday, October 30 (02:24 Greek time) he wrote on X that with Operation Economic Outcast the Iranian regime is “running out of lifelines” and the organisations it backs “are feeling the pressure”. “Tehran is struggling to move money, while the Revolutionary Guards reportedly cannot pay their own soldiers. We are cutting the regime’s ability to fund the Houthis, Hamas and Hezbollah,” he added. These are the claims of a US official and have not been independently verified.

The post accompanies an excerpt of Bessent’s Wednesday, October 28 interview on CNBC’s “Closing Bell: Overtime”. In the interview transcript published by the network, the secretary describes the Revolutionary Guards as people who fear for their lives and are in hiding, leaving the Supreme Leader isolated. “They can’t pay their soldiers. And most of all they can’t find dollars, so they can’t replenish,” he said. For the Houthis, Hamas and Hezbollah he noted that funding is being cut, and that this is “the tip of the spear” when money starts to run short.

The numbers behind the pressure

The secretary gave figures on the scale of the pressure. Possibly for the first time since Iran began producing oil, he said, the country “does not have a single barrel at sea”, with what remains stored behind the naval blockade. He said the rial has collapsed to the point that someone can be arrested for publishing the exchange rate, which may have passed 3 million rials to the dollar. Internal Treasury estimates, he added, show the Iranian economy could shrink by as much as 25% within a year of March, when the blockade or the conflict began, a figure he compared with the 22% contraction of the Russian economy in the three years after the fall of the Iron Curtain.

Bessent described Iran’s power structure as a three-pillar edifice: the elected politicians, the Revolutionary Guards, and the Supreme Leader with the religious establishment. In the summer, he said, the politicians began to voice public concern about the economy, while now the Guards talk “publicly and privately” of collapse. He gave no timeline for when Tehran will return to negotiations, noted that the operation completed eight weeks last Wednesday and called it “the toughest operation ever carried out to isolate an economy”.

Sanctions in practice

The campaign began in late August, targeting the revenues that fund the war, the missile programme and the Revolutionary Guards. On Thursday, October 29, the Treasury’s Office of Foreign Assets Control (OFAC) issued General License FF-1, which authorises the wind-down of transactions with Iraq’s International Development Bank for Investment and Finance. The bank was sanctioned on October 17, when Washington accused it of channelling dollars to Iran. On October 21 the Treasury also sanctioned a law firm with an address in Piraeus over the Iranian shadow fleet.