Washington, DC’s sweeping new sanctions campaign against Iran is forcing South Africa to weigh a long-standing but marginal relationship with Tehran against access to the United States’ economic relationship worth tens of billions of rand.
Countries doing business with Iran are now on Washington’s radar.
At the direction of US President Donald Trump, the US Treasury has launched Operation Economic Outcast, an “unprecedented whole-of-government campaign” targeting Iran and those who support its activities.
The US Treasury Secretary Scott Bessent said the campaign would target Iran’s financial connections around the world and sever the economic lifelines sustaining the regime.
“Those who stand with the United States will reap the rewards of our partnership. Those who tether themselves to Tehran should expect to share in the isolation of a withering regime,” he warned.
The latest campaign targets networks, intermediaries and financial channels that Washington says Iran uses to smuggle oil, evade sanctions and generate revenue.
More than 60 entities, individuals and vessels have already been sanctioned across several jurisdictions over alleged links to Iran’s nuclear and missile procurement, cyber operations and oil-revenue networks.
Washington has also expanded the risk of “secondary sanctions” for foreign entities operating in or providing services to five Iranian sectors: digital assets, technology, gold, aviation and shipping.
South Africa has not been singled out by Washington. At least not yet.
But the US Treasury has warned that every country will be given a defined timeline to shut down Iran-related activities it has identified, otherwise it will act against those that fail to do so.
The US is South Africa’s third-largest trading partner behind the European Union and China.
Companies that continue doing business with targeted Iranian interests could also find themselves exposed to the US financial system.
The US Departments of the Treasury, State and War are engaging governments around the world and warning them that Washington expects action against Iran-related activity it has identified.
But while the world waited to see where Washington’s campaign would land next, US Ambassador to South Africa Brent Bozell III was at Mahlamba Ndlopfu, President Cyril Ramaphosa’s official residence in Pretoria, this week.
Both sides used Facebook to comment on the meeting.
The US Embassy said they had engaged directly on “shared priorities” and reaffirmed their commitment to a strong and mutually beneficial relationship.
South Africa’s post described the meeting as an opportunity to “strengthen and recalibrate” bilateral relations.
The timing was unsettling.
The effects of US pressure on Iran, however, were already being felt in South Africa before the latest campaign was launched.
The new measures build on earlier sanctions against Iran’s financial, petroleum and petrochemical sectors, while expanding Washington’s ability to sanction foreign entities operating in or supporting targeted Iranian sectors.
For South African business, the issue is no longer simply how much the country trades with Iran. It’s whether commercial ties with Tehran could put SA’s access to the far larger American market and financial system at risk.
Economists and international relations experts this week said South Africa should diversify its trade and reduce its vulnerability to US dollar-denominated transactions.
But breaking away from the dollar is neither simple nor something that can happen overnight.
Professor Heinrich Bohlmann of the University of Pretoria said reducing reliance on the dollar would be prudent, but noted that it remains the world’s dominant trading and financial currency.
Bohlmann said direct imports from Iran were now worth less than $4 million (around R65m) a year and that South Africa no longer imported Iranian crude oil.
From an economic perspective, he said, giving up direct trade with Iran would have little impact on South Africa, while risking its much larger US relationship would be far more consequential.
“The US is one of South Africa’s top trading partners,” he said. “Risking the welfare of the entire economy to continue trading with Iran is therefore not a good idea, from an economic point of view.”
Dr Noluthando Phungula, an international relations expert at the University of KwaZulu-Natal, said South Africa needed both currency and market diversification.
But the immediate economic question is less about replacing the dollar than about what South Africa actually stands to lose if its relationship with Iran puts its much larger US economic relationship at risk.
Rasigan Maharajh, professor of public affairs at Tshwane University of Technology, called for faster industrialisation and a strategic shift towards more reliable trading partners.
He said that between January and July 2026, South Africa exported R6.9m worth of goods to Iran and imported R16.5m.
Over the same period, trade with the US comprised roughly R92.4 billion in exports and R58.1bn in imports. But the risk may extend beyond the value of bilateral trade.
He warned that South Africa’s relatively modest trade relationship with Iran could be used by Washington to justify further punitive measures, including tariffs or exclusion from preferential trade arrangements.
For companies, meanwhile, the exposure could be more immediate.
Bohlmann identified MTN as potentially the most vulnerable major South African company because of its significant stake in Irancell. The company’s Iran exposure is already having financial consequences.
MTN reported a R3.9bn non-cash impairment on its 49% Irancell stake in its latest half-year results. About R880m in dividends remain trapped in Iran because of US sanctions. The company has been trying to exit its Iranian investment, but sanctions have made that difficult.
Sasol, by contrast, is less exposed because it exited its Iranian gas-to-liquids joint venture more than a decade ago, Bohlmann said.
The citrus industry offers another illustration of how geopolitical shocks can translate into costs for South African business, although its problems predate Operation Economic Outcast and cannot be attributed to the latest US measures.
On Monday, the same day Washington announced the operation, the Citrus Growers’ Association (CGA) cut its 2026 export estimate to 197.9 million 15kg cartons, from 209.4 million in April.
The CGA said the Middle East conflict had closed routes to markets that would normally absorb a significant share of South African citrus. South Africa usually exports around 20% of its citrus crop to the Middle East.
The conflict also disrupted the supply of empty containers, causing port congestion and increasing shipping and logistics costs, the association said.
The citrus industry is dealing with several pressures at once, including severe weather, exchange-rate risk, disrupted supply and demand, and logistics problems.
Now, the Middle East conflict has added another layer of uncertainty.
In June, after the Middle East conflict began, the South African Reserve Bank (SARB) warned that it had pushed up oil prices, tightened global financial conditions and increased market volatility.
The SARB said South Africa’s financial system remained resilient, but warned that geopolitical conflict was amplifying existing risks, from weaker growth and higher inflation to rising costs and pressure on households and businesses.
On its website, Iran’s embassy in Pretoria posted a message from the country’s Ministry of Foreign Affairs, which accused the US of using the dollar to intimidate other countries and force them to comply with its policies towards Iran.
It said the sanctions violated the UN Charter and called on states not to implement them. Washington said countries that continue to enable Iran should expect to face the consequences.
For South Africa, the question is how much its relationship with Tehran could cost when access to Washington’s financial system and markets carries a much bigger economic prize.
rapula.moatshe@nationalmg.co.za
wendy.jdc@nationalmg.co.za