- US President Trump threatened to blockade the Strait of Hormuz, restricting ship passage
- US Central Command announced a partial blockade starting at 10 am EDT targeting Iranian ports
- Iran charges tolls for some ships and mainly allows its own oil to pass through the strait
US President Donald Trump has threatened to close off the Strait of Hormuz, the economically vital oil artery already blocked by Iran since the war in the Middle East began. Trump has repeatedly ordered Tehran to reopen the waterway unconditionally.
"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 wrote in a post on Truth Social.
"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 chokehold on the Strait-- through which around 20 per cent of the world's seaborne oil and natural gas passes-- has caused severe economic damage to many countries that rely on Gulf crude, and it has led to a surge in oil prices around the world, including the United States.
While Iran has allowed some ships to pass through the waterway since March-- some free of cost and others after charging a fee – it has used control over the strait, including threats that it has been mined, to disrupt the global economy and to pressure the Trump administration.
How Trump Plans To Close Hormuz
US Central Command announced the blockade would begin at 10 am EDT, or 5:30 pm in Iran, and would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and the Gulf of Oman."
CENTCOM said it would still allow ships travelling between non-Iranian ports to transit the strait, a step down from the president's earlier threat to blockade the entire strait.
According to James Kraska, a professor of international maritime law at the US Naval War College, parties at war can exercise the right of "visit and search". This means that Washington and Tehran can stop and inspect even private vessels in waters that are not neutral and decide whether or not they may pass.
Therefore, Kraska told The New York Times that a US blockade of Hormuz would likely mean that any vessel trying to transit the waterway would have to submit to a search if asked to do so, and US forces would be able to determine whether or not to give it passage.
Why Trump Wants To Block Hormuz
Iran has been allowing a fraction of traffic to pass through Hormuz, with reports suggesting it's giving passage to some tankers in exchange for a toll of up to $2 million per ship. More importantly, Iran has been mostly allowing just its oil to pass in and out of the region.
In March, after the war started, Tehran managed to export an average of 1.85 million barrels of crude a day. The quantity is about 100,000 barrels a day more than in the previous three months, according to data and analytics firm Kpler.
Any US blockade is likely to inflict economic damage on Tehran, which would ultimately undermine its ability to continue fighting over the long term by denying it the ability to export oil and earn revenue.
But it's a lever the Trump administration has been unwilling to pull. Because a blockade of the strait, even to Iranian oil, would lead to a surge in price around the globe. That's the reason the US Navy has allowed Iranian tankers to pass through the region so far, as any oil flowing out of the region right now could help keep prices in check.
In fact, after the war started, the US even removed some sanctions on Iran in March, granting Tehran a temporary licence to sell oil that had been sitting afloat on tankers.
But some economic analysts have called on the Trump administration to block the flow of Iranian oil as a means to end its effective control of the strait.
Robin J Brooks, a senior fellow at the Brookings Institution, told the NYT that Iran's dependence on oil exports means it will not be able to afford to keep attacking ships once its own economy takes a hit. On Sunday, he wrote on social media that a blockade "collapses Iran's business model".
Iran's Reaction
But Iranian officials, who are aware of the pressure on Trump due to spikes in energy prices, appear unconcerned. In a post on social media, Iran's Parliament speaker Mohammad Bagher Ghalibaf wrote: "Enjoy the current pump figures. With the so-called 'blockade', soon you'll be nostalgic for $4–$5 gas."
Possible Consequences Of US Actions
Normally, about 150 vessels pass through Hormuz daily. In March, over 150 tankers transited through the waterway in the whole month, according to data from S&P Global Market Intelligence.
Media reports have claimed that some ships that did transit had made arrangements with the Iranian authorities and may have paid a toll or fee for passage.
The halt in traffic has led to a spike in oil prices. Oil prices rose in early market trading after the blockade announcement. The price of US crude rose 8 per cent to $104.24 a barrel, and Brent crude oil, the international standard, rose 7 per cent to $102.29. Brent crude cost roughly $70 per barrel before the war in late February.
