If the Trump administration was expecting it’d quickly wrap up its “little excursion” in Iran like in a repeat of Venezuela, geopolitical reality had different ideas.
On Wednesday, the Iranian government said it was ready for a long war that would “destroy” the global economy, Le Monde reported, as it continues to shut down a key passageway for oil supplies, the Strait of Hormuz.
“Get ready for the oil barrel to be at $200 because the oil price depends on the regional stability which you have destabilised,” Ebrahim Zolfaqari, a spokesperson for the Islamic Revolutionary Guard Corps, told Reuters.
Oil prices have surged since February 28, when the US and Israel opened aggressions by assassinating Iran’s supreme leader Ali Khamenei in a series of missile strikes that also killed the commander of the IRGC, the minister of defense, and other top brass. The strikes have also killed more than 1,000 civilians. One US Tomahawk missile struck an elementary school, killing at least 175 people including numerous students in a massacre that’s now under investigation by the Pentagon.
The regime has not collapsed, as some Trump officials may have hoped, and it retaliated by launching its own campaign of missile and drone strikes across US allies in the Middle East.
The IRGC has vowed that not a “single liter of oil” would pass through the Strait of Hormuz to hostile nations. Approximately 20 percent of the world’s global oil supplies flow through the passage, where Iran has cut off shipping traffic for the past two weeks. The strait connects the Persian Gulf to the Gulf of Oman, providing the only route to the open ocean for supertankers carrying oil from Saudi Arabia, Kuwait, Qatar, the UAE, Iran, and others.
Two oil vessels were struck with explosions in an Iraqi port on Thursday, in suspected Iranian attacks. Three other cargo ships were also struck and set ablaze in the Gulf hours before. The IRGC has claimed responsibility for at least one of those attacks, a Thai bulk carrier.
Whether the gravity of the situation has sunk in for US leadership is an open question. The day before the seeming escalations in the Gulf, Donald Trump declared that the US had already won the war.
Iran’s newly appointed supreme leader Mojtaba Khamenei redoubled pressure on oil markets Thursday. In his first public message since being appointed mere days ago, Khamenei affirmed that the Strait of Hormuz should remain closed, adding his demand that all US bases in the region should be closed, per Reuters.
Last week, Brent crude oil prices reached over $100 per barrel for the first time since 2022, peaking at nearly $120 per barrel on Monday, sending shudders throughout the economy. Gas prices in the US have surged to an average of over $3.50 per gallon, according to AAA, and are already soaring far past that point on the West Coast.
The International Energy Agency said the ongoing war has caused the largest disruption to global oil supplies in history. On Wednesday, it announced that member countries would release 400 million barrels of oil from emergency stockpiles, itself a historic figure, to dampen surging oil prices. The US said it would chip in with 172 million barrels from its Strategic Petroleum Reserve. Despite the announcement, Brent crude rose more than 8 percent to over $100 per barrel overnight, Axios reported.
President Trump was transparent that the strain on oil markets would provide a windfall for US producers.
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” he wrote in a post on Truth Social, his social media site.
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