US blockade of Iran could exacerbate global energy supply disruptions

US President Donald Trump Announces Naval Blockade of Iranian Ports

The US Navy has announced plans to blockade Iranian ports, with the aim of intercepting vessels that have paid a toll to Iran. According to Central Command, the blockade will only affect ships entering and exiting Iranian ports, but analysts warn that it could have far-reaching consequences for international shipping.

Oil prices surged above $100 a barrel on Monday following Trump’s announcement. Trita Parsi, co-founder of the Quincy Institute for Responsible Statecraft, stated that a US blockade would exacerbate the global energy crisis. Parsi noted that any reduction in oil supply would lead to increased prices, which in turn would drive up gas prices.

Analysts also warn that a blockade could trigger retaliation from Iran-aligned groups in Yemen, potentially shutting down the Bab al-Mandeb strait. This strait is an alternative export route for Gulf oil and gas, and its closure could further disrupt global energy supplies.

The Trump administration had previously announced plans to waive some sanctions on Iranian oil exports as part of efforts to ease the global energy crunch. However, the new blockade policy marks a sudden reversal in approach.

Analysts predict that non-Iranian ships may avoid the strait due to concerns over insurance premiums and potential retaliation from Iran. The resulting rise in oil prices could also lead to increased costs for chemicals, fertilizers, and raw materials used in plastics production.

Deborah Elms, head of trade policy at the Hinrich Foundation, warned that the situation for global supply chains could worsen under the blockade. Chad Norville, president of Rigzone, noted that Trump’s threat has further eroded confidence in the strait’s ability to return to normal operations.

Source: Al Jazeera