The U.S. is preparing for a prolonged naval blockade of Iranian ports, a move that could push oil prices to their highest since 2022.
President Donald Trump ordered aides to prepare for an extended blockade of Iranian ports, signaling a significant escalation in economic pressure designed to force concessions from Tehran on its nuclear program and end the two-month-old conflict. The move sent oil prices surging on fears of a protracted disruption to one of the world’s most critical energy chokepoints.
"Iran is hanging on by a thread," Larry Kudlow, a former White House economic adviser, said on Fox Business. "My expectation is we are headed for additional military combat, along with the economic embargo, to finish the job and end the war."
The threat of a prolonged disruption to the Strait of Hormuz, through which roughly 21% of global oil consumption passes, sent Brent crude futures surging nearly 3% to a one-month high. U.S. Central Command has already boarded and redirected 39 vessels, with satellite data showing a surge of over 20 vessels now anchored at Iran's Chah Bahar port, unable to move.
With Iran reportedly just 12 to 22 days from running out of oil storage capacity, the administration is betting that economic collapse will force Tehran to capitulate before the blockade's impact on global energy prices becomes a political liability for the White House. An April 28 Reuters/Ipsos poll showed Trump's approval rating has already fallen to 34%, the lowest of his current term.
Trump's directive, reported by The Wall Street Journal, follows a Situation Room meeting where he rejected Iran's latest proposal. The offer, delivered via Pakistani mediators, suggested reopening the Strait of Hormuz in exchange for lifting the U.S. blockade but crucially did not address Washington's core demand for concessions on Tehran's nuclear program.
"He doesn't love the proposal," a U.S. official told Reuters, confirming the offer fell short. Trump himself took to his Truth Social platform, stating Iran is in a "state of collapse" and urging its leadership to "get smart soon!" and sign a deal. This public declaration came as reports indicated Iran would submit a revised proposal within days, though the process is slowed by the difficulty in communicating with Supreme Leader Mojtaba Khamenei, who was injured in earlier U.S. strikes.
The blockade is the most visible element of a broader strategy the Treasury Department calls "Operation Economic Fury." On Tuesday, Treasury Secretary Scott Bessent warned financial institutions of "severe consequences" for engaging with Iran’s shadow banking network, which he described as a "critical financial lifeline for its armed forces."
The U.S. is also intensifying pressure on China's independent "teapot" refineries, which collectively purchase about 90% of Iran's oil exports. The Treasury last week sanctioned one such refinery, Hengli Petrochemical, and has now issued a broader alert for institutions to scrutinize transactions with these entities.
The escalating pressure campaign is testing regional and international alignments. The Gulf Cooperation Council (GCC), in a meeting chaired by Saudi Crown Prince Mohammed bin Salman, condemned Iran’s "illegal actions" and called for deeper military integration, including a joint ballistic missile early warning system.
However, traditional U.S. allies in Europe have shown less enthusiasm. German Chancellor Friedrich Merz remarked that the U.S. was being "humiliated" by Iranian leaders, prompting a sharp rebuke from Trump, who retorted that Merz "doesn't know what he's talking about!"
The conflict continues to ripple across the Middle East. In southern Lebanon, an Israeli military contractor was killed by a drone strike, and an Israeli strike on a Lebanese army patrol killed five people. Meanwhile, Bahrain, a key U.S. ally, stripped the citizenship of 69 individuals for alleged pro-Iran sentiment and sentenced five people to life in prison for spying for Iran.
This article is for informational purposes only and does not constitute investment advice.
