From bombs to blockades: Who can withstand greater economic pain?

A US military blockade of ships leaving Iranian ports took effect yesterday, and Tehran threatened retaliation against its Gulf neighbors' ports after talks to end the war collapsed over the weekend.

Oil prices have surged with no sign of a quick reopening of the Strait of Hormuz to ease the biggest supply disruption yet. The ceasefire that halted six weeks of US and Israeli air strikes is in jeopardy, with just seven days left until it expires.

US President Donald Trump's decision to impose a blockade on all Iranian shipments leaving or entering the Strait of Hormuz poses the next big test in the war with Iran: which side can withstand greater economic pain - the new leadership in Tehran or Trump himself, writes the New York Times, emphasizing that this move is unlike anything that has happened so far.

Instead of directing missiles and bombs at military targets, missile sites, and Iran's defense industry, Trump will try to cut off the flow of a vital raw material for the country - oil, which accounts for more than 50 percent of its exports and virtually all of the government's revenue.

Trump warned yesterday, after the blockade came into effect, that any Iranian “fast attack” boats that come close to US naval forces in Iran would be destroyed. Describing the Iranian navy as “totally destroyed” during the six-week war between the US and Iran, Trump posted on the social network Truth Social: “What we didn’t hit was their small number of, as they call them, ‘fast attack boats,’ because we didn’t consider them a serious threat.”

"Warning: If any of these ships come near our BLOCKADE, they will be immediately DESTROYED, using the same liquidation system we employ against drug dealers on boats at sea. It is fast and brutal," Trump wrote.

The naval embargo is apparently aimed at reducing Iran's ability to finance its defense by limiting the revenue it generates from oil exports, the New York Times writes.

On the other hand, Iran's strategy seems to be focused on waging a conflict in global markets, where Tehran has discovered new levers of power. Aware that they have lost the military part of the conflict in the first five weeks, but that they have exceeded expectations in the information space and in intimidating their neighbors with precision missile and drone strikes, the Iranians are counting on Trump's tolerance for political pressure to be limited.

If Iranian oil does not pass through the strait, prices could continue to rise, with some companies already planning for a $175 per barrel scenario. Iranians are aware of the potential political consequences of continued inflation in the US, less than seven months before the midterm elections.

"Soon you will look back with nostalgia on four- to five-dollar gasoline," warned American consumers, Iran's chief negotiator and parliament speaker Mohammad Bagher Ghalibaf.

The Iranian Ministry of Defense also said that Trump will fail in any attempt at military intervention in the Strait of Hormuz and the Gulf of Oman.

NATO allies, including Britain and France, have said they will not be drawn into the conflict by participating in the blockade, emphasizing instead the need to reopen the waterway through which about a fifth of the world's oil passes.

The US military's regional Central Command said the blockade would be "impartially enforced against vessels of all nations" entering or leaving Iranian ports in the Gulf and Gulf of Oman. "The blockade will not impede neutral passage through the Strait of Hormuz to or from non-Iranian destinations," Central Command said in a notice to mariners seen by Reuters on Monday.

Two tankers linked to Iran, the Aurora and the New Future, loaded with petroleum products, left the strait yesterday ahead of schedule.

An Iranian military spokesman said that if Iranian ports are threatened, no port in the Gulf or the Gulf of Oman will be safe. Iran's Revolutionary Guard said that any military ship approaching the strait would violate the ceasefire.

Some analysts support the blockade. “It stops Iran’s exports, its revenue, and is a response to their closure of the straits,” Dennis Ross, a former senior US diplomat and Middle East negotiator, wrote on X.com. “They can attack oil facilities in the Gulf, but that puts more pressure on Iran. It also puts a lot of pressure on China to put pressure on Iran,” he added.

“The current situation, where Iran can deny use of the straits to anyone but its friends or those who pay, is untenable,” said Richard Haas, a former senior Republican national security official and former chairman of the Council on Foreign Relations who was among the first to advocate the blockade strategy. “It makes Iran rich while others get poorer,” he continued. “The blockade adds to the economic pressure on Iran that was there before the war, and the war made it worse. If they want to sell their oil, they have to reopen the strait to everyone.”

But others were skeptical, like Vali Nasr, a former US official and professor at Johns Hopkins University. He said Trump's threat to block the strait would not worry the Islamic Republic in the short term, as Tehran reckons the closure would hurt the global economy more than Iran itself.

“That suits the Iranians, it prolongs the pressure on the global economy,” he said. “And the Iranians could close the Bab el-Mandeb [a strategic strait off the coast of Yemen], and the US would have to deal with that as well.”

For Trump, this is another strategic shift. A few weeks ago, he decided to allow Iran to sell oil that was already at sea, hoping to ease supply shortages. But the impact on prices has been minimal. In doing so, Trump has appeared to be waging a soft war - bombing Iran while allowing it to make money. In addition, Iran's introduction of tariffs on traffic through the strait has meant that Tehran has been given a new source of revenue at a time when it needs it most.

The blockade may seem like a clever twist in Trump's favor, but if it drags on, the US president risks once again acting like someone who failed to foresee what could go wrong after the attack on Iran, the New York Times points out. The war he believed would last only a few days is now entering its seventh week. And for the global economy, the worst part of the crisis is far from over.