Coercing Iran: Why Trump’s Hormuz Blockade Has a Short Fuse

This was a curious reaction to the failed reopening of the Strait of Hormuz after last week’s ceasefire announcement. Despite the pause in fighting, only a handful of ships were able to transit the strait while it remained under de facto Iranian control. Tehran claimed that it could not open the strait because it did not know where it had scattered all of its mines, but there was widespread suspicion that Iran was keeping the strait closed to exert leverage over the United States and its Gulf allies.

Given that 20 percent of the world’s oil emanates from the Persian Gulf, the strait’s closure meant that the global energy crisis would continue to worsen. Saudi Arabia and the United Arab Emirates are able to get some oil out with pipelines that bypass the critical waterway, but much of the crude remains trapped in the Persian Gulf.

So, if the problem is that the Strait of Hormuz is closed by an Iranian blockade, how is it helpful to declare a U.S. blockade too? The Trump administration’s calculation seems to be that the rest of the world is already feeling the economic pain from the Iran war—now it’s Iran’s turn.  

Iran has, of course, suffered heavily from the U.S. and Israeli bombing campaign, but it has managed to keep its oil exports close to prewar levels. With the surge in oil prices, Iran has actually reaped a financial windfall from the war—all the more so because Trump relaxed sanctions on Iran’s oil exports to keep prices from skyrocketing any higher. The U.S. blockade is essentially telling Iran: If other nations can’t export through the Strait of Hormuz, you can’t either.

Miad Maleki, a former U.S. Department of Treasury sanctions expert who is now a fellow at the Foundation for Defense of Democracy, estimates that if the blockade is enforced, Iran would suffer $13 billion in losses a month. “Oil/gas accounts for 80% of [Iran] government export earnings and 23.7% of GDP,” he notes. Given that 90 percent of Iran’s oil exports go to China, Beijing would be expected to feel the pain from the U.S. blockade too.

Trump obviously hopes that by ratcheting up the pressure on China and Iran, he will force Iran into accepting the deal that was on offer in Islamabad—which reportedly includes Iran giving up all nuclear enrichment for twenty years, surrendering all fissile material, and ending all support for regional proxies in return for a relaxation of sanctions. But there are a host of events that can go wrong.

While enforcing an undeclared blockade on Cuba, the United States allowed a Russian oil tanker to reach the island last month, apparently because Trump did not want a confrontation with Russia. Is he now prepared to risk a confrontation with Beijing, just as he prepares for a summit with Xi Jinping, if the U.S. Navy stops tankers ferrying oil to China?

The U.S. Navy, with fifteen warships in the area, has the capabilities to enforce a blockade, but the entire region could be in peril if Iran decides to treat the blockade as an act of war—which it is under international law—and starts to fight back. Trump boasts that Iran’s navy is “completely obliterated,” but he’s talking about the regular navy. According to CNN, the Islamic Revolutionary Guard Corps retains roughly half of its fleet of small fast-attack boats. Iran also retains half of its missile launchers and thousands of drones.

The U.S. Navy appears to be enforcing the blockade not in the Strait of Hormuz itself, which is only twenty-one miles wide, but to the east in the Gulf of Oman and the Arabian Sea. That reduces the risk of Iranian attacks against the U.S. Navy, but all the energy infrastructure in the Gulf remains vulnerable. Vulnerable, too, is the pipeline route to the Red Sea that Saudi Arabia is using to get its oil out: The Saudis fear that Iran’s allies in Yemen, the Houthis, could close the Bab al-Mandab Strait that controls the entrance to the Red Sea. After threatening Iran with civilizational destruction last week, Trump backed off his threats to target Iranian power and oil infrastructure—in part because of Iran’s threats to do the same to Persian Gulf states. Trump seems to be assuming that Iran will not carry out this threat in response to the blockade. If that calculation is in error, the results would be catastrophic for the global economy.

Even if Iran does not hit back with military force, Trump is still running a substantial gamble: namely, that Iran has a lower economic pain threshold than the United States does. In other words, he is hoping that Iran will suffer enough economic damage from the blockade that it will agree to end the war on U.S. terms before the global energy crisis forces the administration to pull back.

Yet Iran is a dictatorship that has shown it can withstand years of harsh sanctions and brutally repress popular protests when they arise. The United States is a democracy where the rising price of gasoline is raising inflation and sabotaging the Republican Party’s chances in the upcoming midterm election. The Iran war is already unpopular with American voters, so how long can Trump keep exacerbating the energy crisis before being forced to execute a U-turn?

He could relax his demands on Iran (for example, by allowing Iran to continue a small amount of enrichment under international monitoring) or simply announce—as he has done in the past—that the Strait of Hormuz is someone else’s problem.

With their competing blockades, Iran and the United States are engaged in a high-stakes standoff to see which side blinks first. I wouldn’t bet against Iran.

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy.