President Donald Trump is threatening to seal off the Strait of Hormuz—a crucial waterway he has repeatedly insisted Iran must leave open without condition.
“Effective immediately, the United States Navy, the finest in the world, will commence BLOCKADING all vessels seeking to enter or exit the Strait of Hormuz,” Trump posted on Truth Social Sunday morning. “At some point we will reach the point of ‘EVERYONE IS ALLOWED IN, EVERYONE IS ALLOWED OUT,’ but Iran has not allowed that.”
Iran’s choice to obstruct the strait for oil tanker traffic has inflicted substantial economic harm on nations reliant on Middle Eastern crude, causing global prices to surge, including within the USA.
So why would Trump move to block a passage he wishes to see opened?
The strait isn’t technically closed off—Iran permits certain tankers transit gradually in exchange for fees reaching as much as $2 million per vessel. Crucially, Iran has consistently allowed its own oil to flow into and out of the region throughout the conflict: Iran managed to export an average of 1.85 million barrels of crude daily up to March—approximately 100,000 barrels per day more than in the preceding three months, according to data from analytics firm Kpler.
By interdicting the strait, Trump could potentially sever a vital funding stream for the Iranian regime and its military operations.
This is leverage the administration is hesitant to deploy: shutting down the strait—even just for Iranian oil—risks sending global crude prices skyrocketing.
That is precisely why the U.S. Navy has permitted Iranian tankers passage through the area. Any oil exiting the region right now can help, at least partially, keep energy costs subdued.
Indeed, in March, the United States granted Iran a temporary waiver to sell oil that was already afloat on tankers.
The U.S. has periodically sanctioned Iranian oil for decades, with the Trump administration halting those sales since withdrawing from the Iran nuclear deal in 2018. Trump’s move last month to lift sanctions freed up significant volumes of oil: 140 million barrels, enough to cover global oil demand for about a day and a half, according to the U.S. Energy Information Administration.
Oil storage tanks at a petrochemical production facility on the outskirts of Shanghai, China, on June 28, 2025. China procures approximately 90% of Iran’s oil exports, amounting to about 1.7 million barrels per day. Bloomberg/Getty Images
However, the appearance of a temporary, month-long sanction relief was complicated: the waiver allowed Iran to sell its sanctioned oil to fund the conflict against the U.S. and its allies. Furthermore, Iran realized significant profits from these sales, pricing its oil at a premium of several dollars above Brent crude, the international benchmark.
Anger over soaring gasoline prices compelled the Trump administration to conclude the conflict, and releasing hundreds of millions of barrels potentially bought it some breathing room. Since Iran was selling its oil regardless, lifting sanctions opened avenues for sales to Western nations, not exclusively to China, which remains Iran’s top customer.
The administration has sought any leverage available to keep oil prices in check while prosecuting the war. It coordinated a historic global release of emergency petroleum reserves, and the Trump administration also lifted sanctions last month on hundreds of millions of barrels of Russian crude.
Now, Trump is gambling on potentially driving oil and gas prices even higher to maximize pressure on Iran and bring the conflict to a close.
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