Tehran, Iran – A palpable tension hangs heavy in the air as the United States once again tightens its grip, reimposing a formidable
This isn’t Washington’s first foray into such tactics; a similar blockade was in effect for over nine weeks earlier this year, only to be lifted after a Memorandum of Understanding (MoU) was signed in June. That fragile agreement aimed to halt four months of brutal fighting and crucially, to reopen the strategic Strait of Hormuz. However, the recent resurgence in military strikes over control of this vital waterway saw the MoU unravel. Washington swiftly rescinded oil and banking waivers, preventing Iranian-linked vessels from returning to port to load more crude. The stage is set for a prolonged period of economic strain and heightened regional instability.
The Return of the US Naval Blockade
Immediately following the June MoU, Iran wasted no time, exporting tens of millions of barrels of crude oil, much of it previously held in supertankers near its terminals. But with the recent breakdown, the
Iranian authorities previously admitted that the initial blockade brought their crude exports to a standstill. Mohammad Bagher Ghalibaf, Iran’s parliament speaker, revealed in late June that “we did not export even one barrel” during that period. Energy analyst Hamidreza Shokouhi told Al Jazeera that this new siege means a staggering 1.5 million barrels per day of Iranian oil will be taken off the market, a factor already pushing global oil prices towards the $90 mark. Sustained conflict could easily trigger further spikes.
“That means more pressure on global strategic reserves, which have already been tapped during the war and are facing unprecedented pressure,” Shokouhi warned. He further noted that Washington’s insistence on vessels using the southern route of the Strait of Hormuz, closer to Oman, contributed significantly to the current military escalation. In response, Iran has signaled its intent to ensure no other regional country can export oil via the strait, thereby piling pressure on the US and its allies. “When the US acts this way, Iran also moves in the direction of not prioritising the economy and using the leverage at its disposal,” Shokouhi added.
Broader Conflict and Economic Fallout
The past week has witnessed a relentless, intensifying series of tit-for-tat strikes between the US and Iran. This broadening conflict has left a trail of destruction across both Iran and neighboring countries, with Kuwait and Bahrain enduring heavy targeting by Iranian missiles and drones. The US military, in turn, has systematically struck provinces across Iran, particularly southern areas near the strait. Civilian infrastructure – bridges, tunnels, ports, dock facilities, power stations, and water plants – has been hit alongside military sites. Some observers speculate this could be a grim precursor to a ground invasion of Iranian coastal regions, further exacerbating the impact of the
The Aq Tekeh railway bridge in northern Golestan province, a vital artery connecting Iran to Turkmenistan, Russia, and China for essential imports and exports, was an early target. Though quickly repaired, the strike underscored Washington’s willingness to disrupt trade routes to amplify the blockade’s sting. The previous US naval blockade had already made daily life for over 90 million Iranians increasingly difficult. While widespread shortages of staples were avoided, Iran’s inflation rate, already one of the world’s highest, soared. Prices for basic foodstuffs like eggs, chicken, and cooking oil have more than tripled year-on-year, inflicting deep pain on households and industries alike.
Borzou, a merchant in Tehran’s Grand Bazaar, lamented the market’s instability: “Our sales are very inconsistent. The market is struggling to find prices, there’s too much instability and uncertainty about the future.” He expressed concern over dwindling imported inventories, questioning what the coming months would bring given difficulties in importing through inland routes.
Compounding these woes, the renewed military escalation and the reimposition of the naval blockade have placed intense pressure on the Iranian rial. The currency plummeted to an all-time low against the US dollar, trading over 1.93 million on Saturday. The Tehran Stock Exchange followed suit, with its main index losing 2.4 percent over the past week. Iran’s armed forces have vowed retaliation against any US strikes on civilian infrastructure by targeting similar sites in regional countries hosting US military bases.
“Let’s not forget that the US and Israel started attacks against infrastructure,” Shokouhi recalled, citing hits on South Pars gas fields and Tehran’s oil depots. He warned that if US President Donald Trump continues to target Iranian civilian infrastructure, Tehran, potentially with Houthi assistance, could significantly disrupt shipping in the strategically critical Bab al-Mandab strait. “Trump’s actions over recent months, and particularly over recent days, have only made the situation more intractable and the outlook more uncertain. The current situation cannot continue for much longer, but it is broadening the scope of the conflict and that is concerning,” Shokouhi concluded.
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