Washington DC – United States President Donald Trump has threatened to blockade the Strait of Hormuz, the same waterway he has been demanding Iran reopen to international shipping, in a move that risks pushing global oil and fuel prices even higher.
“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” Trump posted on Truth Social on Sunday. “At some point, we will reach an ‘ALL BEING ALLOWED TO GO IN, ALL BEING ALLOWED TO GO OUT’ basis, but Iran has not allowed that to happen.”
Iran’s decision to restrict oil tanker traffic through the strait has already caused severe economic damage to countries that depend on Middle Eastern crude, including driving up fuel prices around the world. For Eswatini, which imports all of its fuel, any further spike in global oil prices would translate directly into higher costs at the pump.
The strait is not technically fully closed. Iran has been gradually allowing some tankers through in exchange for a toll of up to two million dollars per ship, while continuing to allow its own oil to pass in and out throughout the conflict. Data and analytics firm Kpler recorded that Iran managed to export an average of 1.85 million barrels of crude a day through March, about 100,000 barrels a day more than in the previous three months.
By blockading the strait, Trump could cut off a key source of financing for Iran’s government and military operations. However, the move carries significant risk. Blocking the strait, even to Iranian oil, could trigger a sharp surge in global oil prices, which is precisely why the US Navy has until now allowed Iranian tankers to continue passing through the region.
The United States actually went in the opposite direction in March, granting a temporary one-month licence allowing Iran to sell oil that had been sitting on tankers at sea. The waiver drew criticism because it allowed Iran to sell sanctioned oil and use the proceeds to finance its war against the United States and its allies. Iran was also selling that oil at a premium of several dollars above the Brent crude international benchmark.
Trump had previously sanctioned Iranian oil after abandoning the Iran nuclear agreement in 2018. When those sanctions were temporarily dropped last month, it freed up around 140 million barrels of crude, enough to satisfy the entire world’s oil demand for roughly one and a half days, according to the US Energy Information Administration.
The administration has been pulling every available lever to keep oil prices manageable while prosecuting the war, including coordinating a historic release of emergency oil reserves globally and removing sanctions on hundreds of millions of barrels of Russian oil last month.
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