The U.S. president’s threat to block the Strait of Hormuz after the failure of talks with Iran last weekend threatens to widen the war, now in its seventh week, raising oil prices and increasing the likelihood of further economic hardship around the world.
The U.S. military said it would impose a blockade on all maritime traffic entering and leaving Iranian ports at 10 a.m. Monday Washington time (5 p.m. Moscow time), adding that it would allow other ships to pass through the Strait of Hormuz as long as they did not enter the Islamic Republic.
Mohsen Rezaei, a military adviser to Iran’s supreme leader, said the country “will not allow” such an embargo and that it has “huge untapped leverage to counter it,” ProFinance reported, according to Bloomberg.
While the U.S. is capable of imposing an embargo, it would entail significant costs and risks, Bloomberg Economics analysts wrote. U.S. warships would be closer to Iranian drones and missiles, leading to a dangerous cycle of escalation if either is hit. The Husis, Iran’s allies, could also try to disrupt oil and gas flows in the Red Sea, Bloomberg Economics analysts wrote.
“The risks and costs of a prolonged blockade, as well as potential pressure from other stakeholders such as China, suggest that Trump may not fulfill his promises or support the blockade,” they wrote, adding that Beijing could even use its influence over the U.S. over critical minerals to pressure Trump.
“Nevertheless, the threat itself increases the likelihood of miscalculation, reduces the space for diplomacy, and keeps risks of reduced oil supply and market conditions high.”
