The US has reimposed a naval blockade on Iran's southern ports in a bid to completely halt its oil exports. The decision, taken after a military escalation in the Strait of Hormuz, targets Iran's economy by cutting off its energy revenues.
The previous blockade, which began in mid-April and lasted nine weeks, was lifted in June under a signed agreement. At that time, Iran began exporting tens of millions of barrels of oil that had been stored on supertankers. However, following recent attacks over control of the strait, Washington canceled oil and banking waivers and prevented Iran-linked vessels from returning to ports to load.
US Central Command (CENTCOM) redirected several vessels in the Strait of Hormuz and launched an attack to neutralize the Curaçao-flagged supertanker Belma, which was allegedly carrying Iranian crude oil during the war. Iran is also accused of attacking ships in the strait, which led to US bombing of Iranian coastal areas.
Oil Exports Reduced to Zero
Iran's Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf said in a television interview in late June that during the previous blockade, "we couldn't export a single barrel of oil." Energy analyst Hamidreza Shokouhi stated that the new siege would remove at least 1.5 million barrels per day of Iranian oil exports from the market. This pushed oil prices to $90 per barrel, and he warned they could rise further if the conflict continues.
Shokouhi said, "This means further pressure on global strategic reserves that have already been used during the war." According to the analyst, Washington's insistence during the agreement that ships use the southern route of the Strait of Hormuz near the Omani coast contributed to the current military escalation.
Iran's Countermove and Economic Blow
Shokouhi said Iran responded to the blockade by trying to prevent other countries in the region from exporting oil through the strait, thereby putting pressure on the US and its allies. "When the US acts this way, Iran moves to not prioritize the economy and to use the cards it holds," he said.
The renewed military escalation and blockade have put intense pressure on the Iranian rial. The rial fell to an all-time low on Saturday, the first day of the Iranian week, trading above 1.93 million to the dollar on Tehran's free market. The Tehran Stock Exchange also continued its downward trend last week, with the main index losing another 120,000 points (2.4%) on Saturday to fall to 4.77 million.
Military Infrastructure and Civilian Targets Hit
The mutual attacks between the US and Iran, now in their seventh night, have escalated rapidly. In addition to Iran, Kuwait and Bahrain were also targeted by Iranian missiles and drones. The US military heavily struck provinces across Iran, especially the southern regions near the strait.
Civilian infrastructure such as bridges, tunnels, ports, power plants, and water facilities, as well as military installations, were systematically targeted. Some experts suggested these attacks could be preparation for a ground invasion of Iran's coastal areas.
US forces struck the Ak Tekeh railway bridge in Iran's northern Golestan province last week after the renewed flare-up of hostilities. Although Iranian officials said the damage was quickly repaired, the attack revealed Washington's intention to target import-export routes to increase the impact of the naval blockade. Ak Tekeh lies on the line connecting Iran to Turkmenistan, Russia, and China and is critical for transporting goods such as food and iron ore.
Economic Life Becomes Harder
The previous blockade made daily life harder for more than 90 million Iranians. Although there was no widespread shortage of basic foodstuffs, inflation, already among the highest in the world, climbed further. Prices of products such as eggs, chicken, and cooking oil tripled compared to a year ago.
Borzou, who trades industrial engines and equipment at Tehran's Grand Bazaar, said, "Our sales are very erratic. The market is struggling to find a price, and there is a lot of instability and uncertainty about the future." Borzou added that most distributors are still using stocks from previous imports, but many of these goods come via China and the UAE, and not all can be imported by land.
Iran's armed forces warned they would retaliate against US attacks on civilian infrastructure by striking similar targets in regional countries hosting US bases. Energy analyst Shokouhi said, "Let's not forget that the US and Israel began the infrastructure attacks by striking the South Pars gas fields, oil depots in Tehran, and petrochemical facilities in Mahshahr."
Shokouhi noted that with the help of the Houthis in Yemen, Iran could significantly disrupt maritime traffic in the Bab el-Mandeb Strait if US President Donald Trump follows through on his threat to strike more civilian infrastructure such as power plants and bridges. "Trump's actions in recent months, and especially in recent days, have made the situation even more intractable and the outlook more uncertain. The current situation cannot continue for long, but it is expanding the scope of the conflict, and that is worrying," he added.
