US says sanctions will 'squash' Iran's economy and 'collapse' its regime

US Treasury Secretary Scott Bessent urged US allies to support Washington's efforts to "squash" the Iranian economy.

"We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision," Bessent told broadcaster CNBC.

Bessent's remarks come after US President Donald Trump said that countries providing "any type of lifeline" to the Islamic Republic's regime will face "tremendous economic consequences" .

Bessent did not offer any insight on the measures Trump's team was looking to implement, but said the planned pressure campaign on the Iranian economy would minimise the need of a "large-scale kinetic restart" of the conflict.

Faisal Islam: Iran war pause is welcome but the economic scars will last

The US and Israel started a war with Iran in February, arguing the strikes were to prevent Iran from developing nuclear weapons, which Tehran has consistently denied.

Iran, however, responded by attacking Israel, US bases across the Middle East as well as targeting Gulf Arab allies of the US.

Since then, Iran has largely closed the Strait of Hormuz - the waterway through which some 20% of the world's oil and liquefied natural gas used to transit - causing wild fluctuations in prices on world markets.