"NO ONE" BEYOND REACH OF SANCTIONS

Bessent previously urged cooperation from China, the biggest buyer of Iranian oil for several years, although the US blockade of Iran's ports, renewed in mid-July, has already cut Iranian oil flows to China.

Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between US President Donald Trump and Chinese President Xi Jinping, with any curbs on China's exports of critical minerals especially sensitive.

Asked about Chinese banks on Monday, Bessent said, "We want to make clear here today that no one is above the reach of US sanctions."

The Chinese Foreign Ministry said sanctions and pressure tactics do not help and Beijing would do what was necessary to protect China's interests.

Bessent said the Treasury Department has mapped the networks, facilitators and financial channels that Iran uses to smuggle oil and evade sanctions. He said Washington would be working with US partners to target any source of Iran's "illicit revenue."

The department said the Iranian government was using five sectors - digital assets, technology, gold, aviation and shipping - to prop up its economy and they were on notice for sanctions. The Treasury has also imposed sanctions on nearly 60 entities, individuals and vessels.

Trump has threatened tariffs on goods from countries doing business with Iran, which include Turkey, Iraq and India, although the Supreme Court struck down the legal basis for such taxes.

Iran has dismissed the US threat and issued a new warning to shipping not to pass through the Strait of Hormuz without its permission, listing 45 ships it said had violated its rules and threatening retaliation for any ship-to-ship transfers with them.

TALKS WITH PAKISTAN, PROJECTILE HITS TANKER

Pakistan's army chief Asim Munir, who has built a personal rapport with Trump, was in Iran on Monday for talks, Iranian media said. Pakistan said the visit aimed "to promote regional peace and stability", and a Pakistani source said Munir would meet people close to Iran's supreme leader.

Two Pakistani sources said Trump had called Munir last week, with another saying the main request was to bring Iran back to negotiations. The White House confirmed the call but did not comment on its substance.

The US and Iran have not conducted air strikes on each other's militaries for weeks, but their last official direct talks to end the six-month-old conflict took place in June and strikes on vessels in the Strait of Hormuz have continued.

A projectile struck a tanker west of the Saudi port city of Yanbu in the Red Sea on Monday, causing a fire on the main deck, shipping monitors from the United Kingdom Maritime Trade Operations said.

A spokesperson for Iran's Houthi allies, who last month announced they would block Saudi oil exports diverted to the Red Sea to avoid Hormuz, said they had attacked a vessel in the area. Saudi Arabia's national shipping company confirmed that one of its vessels had been attacked.