{"id":659860,"date":"2026-05-10T08:50:29","date_gmt":"2026-05-10T08:50:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/659860\/"},"modified":"2026-05-10T08:50:29","modified_gmt":"2026-05-10T08:50:29","slug":"the-weapon-that-can-reopen-the-strait-of-hormuz-its-the-economy-stupid","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/659860\/","title":{"rendered":"The weapon that can reopen the Strait of Hormuz? It\u2019s the economy, stupid"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Vessels in the Strait of Hormuz near Bandar Abbas, Iran, May 4.Amirhosein Khorgooi\/ISNA\/WANA\/Reuters<\/p>\n

The United States and Iran have discovered that their most powerful weapon is not military, but economic. Each can stop the other side\u2019s oil from moving through the Strait of Hormuz<\/a>. <\/p>\n

That should be advantage America because, as I\u2019ll explain in a moment, Iran is more exposed to a blockade than the U.S. and its allies.<\/p>\n

However, the two sides operate on different time scales. Washington is on a stopwatch. Iran is on a calendar. Advantage Tehran.<\/p>\n

Both sides would like the strait to reopen, but on their terms. Each sees continuing its blockade, with occasional escalations to warfare, as happened on Thursday<\/a>, as an opportunity to encourage concessions from the other.<\/p>\n

Why the Strait of Hormuz has been a global commerce chokepoint for centuries<\/a><\/p>\n

Iran\u2019s ability to target its neighbours\u2019 economic lifelines is the weapon it has wielded since the first day of the war. According to the International Energy Agency, 19.87 million barrels of oil and oil products a day were exported through the strait prior to the start of the U.S.-Israel bombing campaign on Feb. 28<\/a>.<\/p>\n

Tehran responded to the attack by announcing that it would prevent tankers and other ships from transiting the strait without permission. Nearly all non-Iranian traffic immediately stopped and has not restarted.<\/p>\n

The impact on the global economy, and the economies of Iran\u2019s Persian Gulf neighbours, is substantial. <\/p>\n

However, Iran has not bottled up all of the Gulf\u2019s oil and gas. Even with the strait closed, a fair bit of oil is still getting out. <\/p>\n

Saudi Arabia has a pipeline running across the country to the Red Sea port of Yanbu, built long ago as an insurance policy. It has a capacity of seven million barrels a day, and was only carrying two million barrels prior to the war, according to the IEA<\/a>. That means it can divert an additional five million barrels from the closed Persian Gulf to the open Red Sea.<\/p>\n

The United Arab Emirates has a similar backdoor: a pipeline from oil fields on the wrong side of the strait to the port of Fujairah on the Gulf of Oman. It can carry up to 1.8 million barrels a day, and had 700,000 barrels of unused capacity earlier this year, according to the IEA.<\/p>\n

Opinion: The fog of war only gets thicker when it becomes a war of words<\/a><\/p>\n

Some back of the envelope math: Of the 19.87 million barrels of oil that used to move through the strait, 2.41 million were from Iran and 17.46 million were from other countries. Because of those Saudi and UAE pipelines, around one-third of non-Iranian oil that used to go through the strait can bypass it.<\/p>\n

Iran, in contrast, has little immediate ability to divert oil around the U.S. blockade. Prior to the war, nearly all of its oil exports went by ship. <\/p>\n

Those exports continued during the early weeks of the war, as the White House, showing extreme concern for global oil prices, declined to block tankers carrying Iranian oil. Iran was allowed to earn windfall profits.<\/p>\n

Team Trump eventually realized that wasn\u2019t a brilliant strategy. Last month, the U.S. finally responded to Iran\u2019s blockade of the strait by imposing a counterblockade of Iranian ports.<\/p>\n

Iran can export some oil by road to neighbours such as Pakistan, or via the land-locked Caspian Sea to Russia, Azerbaijan and Kazakhstan. There\u2019s also a rail link to Turkmenistan that runs all the way to China. But absent infrastructure upgrades on land that cannot happen overnight, it appears that the vast majority of Iranian oil is stuck if it is unable to move by sea.<\/p>\n

The Iranian blockade hurts the global economy and the economies of the Gulf states. But the U.S. counterblockade hurts Iran more.<\/p>\n

Opinion: The Iran war, the Saudis\u2019 bold bet and why Canada needs a new pipeline<\/a><\/p>\n

On Thursday evening, fighting appeared to have abruptly restarted, with Iran reported to have fired on U.S. Navy ships transiting the strait, and the U.S. responding with air strikes inside Iran. As with the blockade and counterblockade, each side appeared to be escalating to force the other to de-escalate. <\/p>\n

Mr. Trump should never have started the war, among other reasons because military force cannot achieve strategic objectives such as regime change or ending Iran\u2019s nuclear program. The long-standing tactic of economic cold war was far more effective.<\/p>\n

However, if Mr. Trump can show patience, and avoid sabotaging negotiations that offer him the best hope of extraction from his quagmire, the economic pressure on Iran may bring the war to a modestly satisfactory conclusion. Or at least a not entirely unsatisfactory end. <\/p>\n

The least-bad outcome is a return to the status quo ante. The two sides would call it a draw. The Tehran regime would remain very much in power. But free passage through the strait would return.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Vessels in the Strait of Hormuz near Bandar Abbas, Iran, May 4.Amirhosein Khorgooi\/ISNA\/WANA\/Reuters…\n","protected":false},"author":2,"featured_media":659861,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-659860","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/659860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=659860"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/659860\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/659861"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=659860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=659860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=659860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}