Donald Trump’s blockade of Hormuz is a dangerous gamble

WHEN AMERICA and Israel began their war on February 28th, many expected Iran to choke off shipping in the Strait of Hormuz. Few would have predicted that less than two months later, Donald Trump would impose his own blockade, targeting traffic to and from Iranian ports and coastal areas. It went into effect on April 13th. Mr Trump hopes economic strangulation might force Iran to open the strait where bombs have failed. It is a gamble that could compound the global energy crisis and lead to fresh escalation.

America’s rationale is simple. Iranian threats have drastically reduced tanker traffic through Hormuz. But Iran has continued to export its own oil, albeit in smaller quantities. It has also allowed some ships to pass if they pay a fee. Mr Trump’s message is that if neutral cargo cannot pass unhindered, Iran’s can’t either. The military aspect of the plan is “absolutely feasible”, says Mark Montgomery, a retired rear admiral. America can board and seize ships relatively easily. “You don’t have to catch every ship,” he adds. “Just enough ships to send the message.”

The economic and political aspects are trickier. The aim, presumably, is to sever Iran’s economic lifeline and force the regime to make concessions in peace talks, particularly over its nuclear programme. In theory, Iran is vulnerable. Given its current crude-oil storage levels, it may be forced to curb production within 10-20 days of a full, effective blockade, reckons Ernest Censier of Vortexa, a data firm. “As Iran’s oil exports collapse, there’ll be no cash for imports, so activity implodes, the currency goes into a devaluation spiral and hyperinflation ensues,” argues Robin Brooks of the Brookings Institution, an American think-tank. “There’s no doubt in my mind this will bring the mullahs to the negotiating table in good faith.”

Others are less sure. Iran had assumed its oil exports would be disrupted, says Esfandyar Batmanghelidj, the chief executive of the Bourse & Bazaar Foundation, a think-tank. It can endure maybe six months of pressure by printing money, selling 100m or so barrels of oil in floating storage off Malaysia and China, and securing informal credit from import-suppliers.

That leaves two big questions. One is the impact on energy markets, including in America. The loss of Iranian output alone is not catastrophic. But it compounds the far greater volume of Gulf supply trapped by the largely closed strait. With the ceasefire looking shaky, Iran has little incentive to reopen the passage and could well restart attacks on neutral ships.

Importers would be forced to draw down already limited stocks, potentially pushing Brent crude futures towards $150 a barrel by the end of April. Factor in the risk of Iranian strikes on Gulf production facilities, pipelines and ports as well as the possibility of attacks on Red Sea shipping by Iran’s Houthi allies in Yemen, and the measure looks unlikely to survive a few weeks without prompting another price surge.

The second issue is which countries might be caught in a blockade. India, for instance, has denied paying a fee to get its ships through, which Mr Trump said on April 12th would be the trigger for interdiction. But on the same day America’s Central Command said that the blockade would be enforced impartially—a requirement in international law—against ships from all countries that had passed through Iranian ports or coastal waters.

That would cover the Indian vessels. Oil bound for China, Pakistan and Thailand also moved out of Hormuz in the days after the ceasefire. Prior to that, France and Turkey, both American allies, had sent their ships through, apparently with Iranian consent. America might only need to board a handful of ships to deter others from attempting to break out. But even that could anger some friendly countries in the process. Some American officials think China will not challenge the blockade, but accepting it would set a dangerous precedent. China has long worried about a blockade around the Strait of Malacca in the event of a war in the Pacific.

Mr Trump’s decision to impose a blockade, which came after he toyed with the idea that he might “jointly” control Hormuz with Iran’s regime, a practice that would upend international law governing such waterways, suggests that the principle of freedom of navigation is coming under enormous stress. Kevin Rowlands, who ran the Royal Navy’s think-tank until last year and now edits the RUSI Journal, a military journal, concludes that it is “another nail in the coffin for any pretence that there is such a thing as a rules-based order or international law”. ■