Iran's Expediency Council declared Saturday that the Strait of Hormuz will remain closed to US ships, with member officials calling for American withdrawal from the Persian Gulf entirely. The waterway, which normally carries one-fifth of global oil supplies, has been largely stalled since US-Israeli strikes on Iran began February 28.
The economic ramifications now cascade across continents. US gas prices have jumped 23 percent to $3.68 per gallon since the conflict began, while Iran's Revolutionary Guard Corps warns oil could hit $200 per barrel if "not one litre" passes through the strait. Global strategic reserves are bleeding 400 million barrels to compensate for the closure, a finite buffer that cannot sustain indefinite disruption.
Bloomberg reports that Kharg Island, handling 90 percent of Iran's oil exports, took heavy US bombardment Friday evening in what Trump administration officials described as targeting "mine and missile storage facilities while preserving energy infrastructure." Yet Iran's retaliation has expanded beyond the strait itself—smoke rose from UAE's Fujairah port Saturday after Iranian drone debris sparked fires, while the US Embassy in Baghdad absorbed two drone strikes.
The blockade reveals the fundamental asymmetry of Persian Gulf geography. Iran needs only to threaten the 21-mile-wide chokepoint to paralyze global energy flows, while the US must maintain constant naval presence across thousands of square miles to keep it open. Two LPG tankers managed to slip through to shortage-hit India this week, Bloomberg noted, but these isolated successes underscore how completely Iran has throttled normal commerce.
What remains unclear is Iran's precise criteria for reopening the waterway. CNN reports Iranian sources suggest oil shipments might resume if paid in Chinese yuan rather than dollars—a potential off-ramp that would serve Tehran's de-dollarization objectives while providing economic relief. Yet Saturday's Expediency Council statement contained no such nuance, demanding complete US withdrawal from Gulf waters.
The trajectory points toward escalating brinkmanship with no clear resolution mechanism. Iran appears willing to sacrifice its own oil revenue—Kharg Island's damage directly hurts Tehran's finances—to maintain leverage over global energy markets. The Trump administration faces the choice between accepting Iranian terms that would represent a strategic retreat, or escalating military pressure that risks wider regional war. With strategic reserves finite and gas prices climbing toward politically dangerous territory, time favors neither side.