US hits major Russian bank VTB with Iran-linked sanctions

WASHINGTON – The United States on Monday slapped new sanctions on VTB Bank, one of Russia’s largest financial institutions, accusing it of helping Iran evade sanctions. 

The state-controlled lender becomes one of the biggest global names yet caught up in Washington’s campaign to squeeze Iran’s economy amid faltering efforts to end the nearly seven-month-old US-Iran conflict as new flashpoints emerge in Yemen and Saudi Arabia. 

Details: The US Treasury Department’s Office of Foreign Assets Control designated VTB under Executive Order 13902 for operating in Iran’s financial sector and establishing correspondent banking relationships with sanctioned Iranian banks. The Russian state-owned bank is now among the most comprehensively sanctioned financial institutions in the world, according to the US Treasury.

According to a press release issued by the US government, VTB has opened offices in Iran in recent years and established correspondent relationships with sanctioned Iranian financial institutions over the past three years. Additionally, the release noted that the Russian bank began taking steps to expand its presence in Tehran in January 2025 and has worked to move billions of dollars in frozen Iranian assets. It also created a settlement system using Iranian rials and Russian rubles through correspondent accounts to facilitate bilateral trade.

VTB was already subject to US sanctions. OFAC designated VTB in January 2025 for operating in Russia’s financial services sector and in February 2022 for its links to the Russian government and financial sector.

Monday’s action means property and interests in property belonging to VTB that are in the US or under the control of US persons will be blocked. The sanctions also expose foreign financial institutions that conduct certain significant transactions involving VTB to potential secondary sanctions.

The move follows a series of recent actions under Operation Economic Outcast, the campaign Treasury Secretary Scott Bessent launched Aug. 24 after US President Donald Trump announced his “Economic D-Day” plan. The US Treasury has already targeted Iranian financial facilitators in Turkey and the United Arab Emirates and, last week, sanctioned 27 Iranian airlines and additional companies and intermediaries involved in Iran’s aviation sector.

Bessent said last week that Washington would sanction a “large” bank as part of its continuing pressure campaign against Tehran.

Why it matters: Russian firms are now firmly in Washington’s crosshairs as the US Treasury presses ahead with an economic pressure campaign facing new headwinds. Although VTB becomes a key name targeted by Operation Economic Outcast, the Russian bank is no stranger to sanctions, and the move won’t assuage critics who question whether the campaign goes far enough.

Although attention has been focused on whether the United States would aggressively pursue Chinese entities as part of this campaign, Russian firms have also served as important lifelines for Iran, making them natural targets as the US Treasury makes moves across oil, shipping, aviation, finance and digital assets in an effort to close remaining loopholes.

So far, the US Treasury has refrained from taking major measures against Chinese companies, but new sanctions against VTB arrive as the US campaign and blockade on Iranian shipping appear to be successfully dialing up pressure on Iran’s economy as oil revenues dry up, inflation surges and the rial plunges to record lows. 

The question is whether that pressure can force Tehran to change course before Iran and its regional allies cement additional leverage. Crucially, a lightning offensive by the Iran-linked Houthis has tightened the Yemeni group’s grip on the Bab al-Mandeb Strait, imperiling Saudi Arabia’s ability to export crude as the kingdom’s own infrastructure comes under attack. 

Events in Yemen and Saudi Arabia have added a volatile new element to the conflict, while giving Iran more sway over another key global energy chokepoint. Oil has surged on the news, with international benchmark Brent crude trading near $110 per barrel this week, in sight of wartime highs around $120 per barrel reached in April.