Control of the Strait of Hormuz is Iran’s most important goal, and Trump may give it up

Experts say any ceasefire or US withdrawal that relinquishes control of the strait could create new problems, including potentially triggering a nuclear arms race between Gulf states. But taking control of the strait militarily involves enormous costs and risks, including a strategic offensive that is insufficient to occupy the country. On March 31, Trump said he wants to leave Iran in two to three weeks, an hour after he shouted at allies to « go get your own oil. »

A continuation of the status quo — in which the United States and Israel drop Iran’s ambitions while Iran levies multimillion-dollar tolls to allow select ships to pass through the strait — could send the global economy into recession.

« If this goes on for another two months, we’re going to be in a global recession. There’s no getting around it, » said Jim Wicklund, a veteran oil analyst and CEO of PPHB energy investment firm. Luckclaims that the United States is staring down the barrel of a credit crunch and sky-high inflation.

Even a small opening of the strait would only bring temporary relief. Oil and natural gas prices may fall as more traffic flows through the strait, but they would remain much higher than they were in February before the U.S. and Israel went to war, especially if Iran continues to charge a toll of $2 million per vessel. « The whole world can’t stand a long-term tax, » Wicklund said. « The risk premium is higher, even if the strait opens tomorrow. »

The US must either put « boots on the ground » to take control of the narrow strait – through which 20% of the world’s oil, liquefied natural gas, and petrochemical runs— or reach some kind of truce that is unlikely to last, he said. « Trump has to do something, and he has to do something soon. »

Bob McNally, former White House energy adviser under George W. Bush and founder of Rapidan Energy Group, took it a step further if the U.S. walked away without militarily taking control of the strait.

« It would be a catastrophic setback to US foreign policy interests that I think would exceed even our defeat in Vietnam, » McNally said. Luck. « Anyone would be hard-pressed to find a precedent or analogy for what a loss that would be. »

Where we are

More than a month after the war broke out, the average price of a gallon of regular gasoline in the United States rose above $4 on March 31 for the first time since 2022. California, Oregon and Hawaii all topped $5.

And the effects are much worse in other parts of the world the supply shortage is growing In Asia, where fuel shortages are now scattered across Europe. This is where the destruction of demand comes to a head in April.

On March 30, Trump threatened to « completely destroy » Iran’s electricity and water infrastructure if the strait is not opened – potentially a war crime. One day he chided America’s allies for not helping enough. « You need to start learning to fight for yourself, the US is no longer there to help you, just like you weren’t there for us. Iran is basically destroyed. The hard part is done. Go get your own oil! » he posted on social media.

« We’re leaving because we have no reason to do this, » Trump later told reporters at the White House. « We’ll be leaving very soon. »

With Pakistan and now China increasingly acting as mediators, on March 31 they offered a five-point peace initiative that included a call to « restore normal passage through the strait as soon as possible. »

Rystad Energy’s chief economist Claudio Galimberti sees a fragile peace as the most likely outcome in the coming weeks. After all, only about 5% of typical traffic passes through the strait, which is not sustainable.

« It would be a very fragile ceasefire. It’s very unstable, » Galimberti said.

If the ceasefire allows only 50% or less of traffic to resume, « this would be a very high inflation scenario » for the world, with oil prices likely to remain above $100 a barrel, he said. If it is opened almost completely in the toll scenario, prices will continue to fall, but would still remain well above pre-war February levels.

For this reason, McNally and Wicklund see US boots on the ground as more likely to get through a military campaign. They think Trump is frustrated, but mostly pretending right now.

« I think it’s likely that we’re going to see an increase in combined operations — air, sea and land — to undermine Iran’s ability to threaten the Hormuz traffic, » McNally said.

I learned the effect

The alternatives are much worse, McNally argued.

« The Gulf states and Israel would not accept Iran’s long-term control of Hormuz. I think that would make another conflict just a matter of time. And it’s a conflict that the United States would probably pull (back) into, » McNally said. « I don’t think it’s a sustainable scenario where we go and say, ‘Hey, cut your deal with Iran.’ They are now the keeper of customs. Good luck. » »

The geopolitical precedent would also turn out to be dire, McNally said, effectively negating the ramifications of Reagan’s Carter Doctrine. The 1980 Carter Doctrine stated that the United States would intervene militarily to protect its interests in the Middle East from outside forces, a response to the Soviet Union’s invasion of Afghanistan. The 1981 Reagan succession, which came during the Iran-Iraq war, expanded the doctrine but also promised to secure internal stability in the Middle East, especially Saudi Arabia.

« We would undo Reagan’s corollary to the Carter Doctrine and eventually perhaps the doctrine itself, » he said. « I think eventually China or Russia would like to enter there. »