The United States has virtually shut down Iran’s oil exports in recent weeks, tightening a blockade in the Strait of Hormuz while the war launched by the U.S. and Israel in February drags on with no exit in sight. The pressure has driven Iran’s economy deeper into free fall, but it has not produced the uprising Washington seems to want.
Who Pays for the Blockade
Iran’s oil exports dropped from 1.85 million barrels a day last spring to around 255,000 in August, according to figures compiled by Homayoun Falakshahi, an oil expert at Kpler, a global trade monitor. At the same time, exports of non-Iranian oil rose from 300,000 barrels a day at the height of the war to 8.4 million in September, and exports through alternative routes took that number to 10.8 million. U.S. Energy Secretary Chris Wright said on Sunday, “we’re probably two-thirds or more of preconflict flows.” Falakshahi said non-Iranian exports were at around 14 million barrels a day before the war.
The Strait of Hormuz matters because a fifth of the world’s traded oil and gas transits there in peacetime. Iran effectively closed it in the opening days of the war, using the worldwide economic shock as leverage. Now the balance has flipped. A U.S. blockade has choked Iran’s exports while the American military has facilitated greater exports by Gulf countries, according to the Kpler figures. That’s the hierarchy in plain sight: one side gets the ships, the other gets strangled.
The tightened blockade and new U.S. sanctions are already taking a heavy toll on Iran’s economy, driving up prices and causing even longer lines outside gas stations. So far, though, they’ve shown no sign of pushing the country’s increasingly hard-line leaders to make concessions on the Strait of Hormuz, Iran’s disputed nuclear program or its support for armed groups in the region.
No Exit, No Victory
An agreement reached in June quickly crumbled, and there’s been no sign of diplomatic progress since then. Low-level fighting persists, and the U.S. does not seem to have an exit strategy. Mona Yacoubian, a Middle East expert at the Center for Strategic and International Studies in Washington, said, “Unfortunately, the U.S. is not winning in the war with Iran despite its limited success in loosening Iran’s grip over the strait and the devastating impact on Iran’s economy.” She added, “Iran shows no sign of backing down, and instead has demonstrated a willingness to not only fight back, but escalate wherever it can. The war is likely to be protracted with no clear victor.”
Ali Vaez, an Iran expert at the International Crisis Group think tank, said, “Washington’s main problem is that it still lacks a theory of victory: More ships are getting through, and Iran is hurting, yet none of that has produced a political outcome.” That’s the language of managed disaster. More ships, more sanctions, more suffering, and still no political result the rulers can point to as success.
Iran has continued to attack ships in the strait, drawing limited U.S. strikes on its coastal areas and then responding with missile attacks on Arab countries hosting U.S. forces. With the U.S. supply of sophisticated interceptors showing strain, Iran could be tempted to escalate its attacks or respond through regional proxies. The Iran-backed Houthis launched a wave of attacks on Saudi oil facilities this week as part of a conflict that goes back more than a decade but has heated up in recent weeks.
The Costs Get Passed Down
Brent crude, the international benchmark, surged above $100 a barrel this week, and diesel, which is heavily used in transport and farming, hit a record, potentially stoking inflation. U.S. President Donald Trump has acknowledged that gas prices are likely to stay high through the midterm congressional elections. The bill keeps landing on ordinary people, while the people making the decisions talk about strategy and leverage.
The war has already cost U.S. taxpayers more than $37.5 billion and left 18 U.S. service members dead, and it is expected to weigh on Republicans in November’s election. Trump said he has no regrets about starting the Iran war and added that, “If I had it to do again, I would do exactly what I did.” Speaking to Fox News presenter Laura Ingraham on Thursday stateside, Trump said he would have attacked Iran despite the impact on the midterm elections. Ingraham told Trump, “If we hadn't done Iran, you would be cruising to midterms victory right now,” and Trump replied, “supposing we were cruising, and all of a sudden Iran has a nuclear weapon. They would use it.”
He added that if Iran had a nuclear weapon, the Islamic Republic would “wipe out” Israel and the Middle East, and start hitting U.S. cities. In separate comments to NewsNation on Thursday, Trump denied reports that there was any damage to U.S. assets after Iran claimed it had hit multiple U.S. fighter aircraft at a base in Jordan. Asked if there was any truth to the reports, Trump said, “No damage. No nothing.”
Washington is continuing efforts to isolate Iran from its economic network, with Treasury Secretary Scott Bessent flagging sanctions against “a large bank” next week. Bessent said, “We're going to do it on Monday because we want to honor the memory of our fallen citizens on 9/11. But watch this space on Monday.” He said the administration has sanctioned and closed the Dubai branches of the second largest bank in Egypt, claiming that the bank had given Iran $1.8 billion. He also said the “largest Turkish bank” that had been giving to the Iranians was sanctioned, though he did not specify which bank.
Trump said in the NewsNation interview that he didn’t know whether Iran would be able to hold out under the current economic pressure. “But it'll get settled after the elections. Or maybe sooner. But it'll get settled right after the election,” he said. Trump also said the war will end immediately after the midterm elections and that oil and gas prices will fall, repeating months-long claims that the conflict will end soon. For now, the war grinds on, the blockade holds, and the people at the bottom keep paying for a fight run by states, militaries, and the banks that grease them.