Kamal Ghorui
Nearly six weeks of war between Iran and US have ended for now, with peace still remains elusive after the failure of Islamabad talks. US president Donald Trump, meanwhile, has escalated pressure on Iran, warning of strong action if it did not open the Strait of Hormuz.His latest threat includes US naval blockade of the key oil route, through which nearly 20% of the world’s crude passes.The warning follows a familiar pattern. Months earlier, Trump had used similar tactics against China, threatening to cut exports and impose 100% tariffs.Now, as tensions rise with Iran, Trump appears to be using the same approach of raising pressure to force negotiations.
Iran follows China
Iran is responding in a way similar to China’s earlier stance. When faced with US tariffs, China restricted exports of rare-earth minerals, which were critical for electronics and defence. This forced the US to ease some of its pressure.China produces about 90% of the world’s rare earths, a group of 17 elements used in defence, electric vehicles, energy and electronics. The United States has only one rare earths mine and depends largely on China for its supply. “China made that list strategically,” said Mel Sanderson, a director at American Rare Earths told Reuters at that time.Iran is now using its control over the Strait of Hormuz similarly. The country sees the waterway as its main leverage against the US, using it to influence global oil supply and push for negotiations. Iran has not backed down despite strong warnings from Washington.
Hormuz ‘strain’
Before the war, the Strait, a narrow route carrying about a fifth of the world’s oil and gas — was treated as an international waterway. Iran monitored activity, sometimes harassed ships and intercepted vessels, but did not try to take full control.Now, that situation has changed. Iran has moved from tracking tankers to effectively controlling movement, acting as a gatekeeper by deciding which ships can pass and on what terms. It is also seeking to charge vessels for safe passage.From the Gulf’s point of view, this has raised serious concerns. Mistrust of Iran has increased after its strikes on energy sites and commercial hubs in the region.
Markets react
The impact of the standoff is already visible in global markets. After Trump’s blockade threat, Brent crude prices jumped 8% to $103 per barrel, with analysts warning of further increases.Higher oil prices are expected to affect consumers directly. Rising fuel costs could increase overall expenses, with households already spending more due to inflation.Iran’s oil exports, estimated at around 2 million barrels per day, have been adding supply to the global market. Any disruption could tighten supply further and push prices higher
Iran won’t back down
Iranian leaders have made it clear they are prepared for economic pressure. Speaker of the parliament of IranMohammad Bagher Ghalibaf said, “Enjoy the current price of gasoline… you will soon miss $4 to $5 gasoline,” warning of rising fuel costs if the blockade continued.According to a CNN report, prolonged conflict could push oil prices above $120 per barrel, increasing pressure on global economies. Higher fuel costs could also raise borrowing costs and inflation.Despite military losses, Iran continues to hold economic leverage through the Strait of Hormuz. For now, it is not showing signs of stepping back, signalling a prolonged standoff with the United States.
