Trump Orders Iran Port Blockade: How it Could Impact Global Prices

The global economy is facing the prospect of a severe energy crisis following President Donald Trump’s Sunday, 12 April, announcement of a total blockade on Iranian ports, a move experts warn could trigger a “new shock” to international markets.

The blockade, targeting the strategic Strait of Hormuz, threatens to sever vital oil supplies to Asia.

Crude prices have already reacted sharply to the news, jumping 8% to surpass $100 per barrel during early Asian trading.

A Precarious Balance

The escalation follows Tehran’s own imposition of “transit rights” in the Strait, which had already restricted maritime traffic in retaliation for Israeli-American strikes.

Normally, one-fifth of the world’s oil passes through this narrow waterway.

Amir Handjani, of the Quincy Institute for Responsible Statecraft, described the blockade as an “act of war” should the US Navy choose to confront merchant vessels from major powers such as China, India, and Pakistan.

“The Iranian crude was providing some relief to the market,” Mr Handjani noted, warning that the move compromises a fragile global equilibrium already weakened by falling exports from Gulf monarchies.

The Rise of the ‘Ghost Fleet’

Despite the conflict that began on 28 February, Iran has maintained remarkably stable exports, averaging 1.8 million barrels per day since early March.

This has been largely attributed to Tehran’s “ghost fleet”—a sophisticated network of ageing tankers operating under false flags and manipulated GPS data to bypass international sanctions.

David Tannenbaum, director at Blackstone Compliance Services, expressed surprise at the fleet’s wartime efficiency.

He noted that recent temporary easing of US sanctions—intended to prevent a total market collapse—actually gave the ghost fleet a “boost,” allowing Iranian crude to move from a 40% discount to a 10% premium.

Between 1st March and 12th April, 58 tankers crossed the Strait, with nearly 80% originating from Iranian ports, carrying a total of 11 million tonnes of crude.

Legal and Political Gambles

The move has been met with legal scrutiny. Elisabeth Braw, an expert at the Atlantic Council, characterised the blockade as a “poker move” by the Trump administration after exhausting other options, while noting that imposing blockades on merchant shipping is “illegal” under the UN Convention on the Law of the Sea.

For Tehran, maintaining control of the Strait is viewed as an “existential” necessity to fund post-war reconstruction.

Conversely, analysts suggest the US administration may be forced to pivot if the market reaction triggers domestic inflation and a stock market decline.

Market Summary

• Oil Price: Surpassed $100/barrel (up 8%)
• Key Asset: 11 million tonnes of crude exported via the Strait since March
• Primary Impact: Disruption of supply to China and India

Source: Defi Media