President Trump’s first naval blockade on Iranian ports in April caused oil prices to rise, but not to the stratospheric levels some feared. And Tehran’s oil exports plunged, depriving Iran of billions in revenue.
The strategy may be harder to pull off a second time without inflicting broader collateral damage to markets.
U.S. oil reserves, which have been steadily drawn down since the start of the war to help combat global shortages, are now at their lowest levels since 1983. Commercial inventories also have been run down. And other oil-producing countries in the region may have a harder time getting their ships out because of the heightened risks.
Another wild card is China. Usually the world’s largest oil importer, China has been helping to keep oil prices at bay by significantly decreasing imports of crude. New data on Tuesday showed that pattern held at least through June. But China might not continue on that path.
“We have now run through all of the buffers which helped moderate oil and natural gas and to some extent fertilizer and helium prices for the first three or four months of the war,” said David L. Goldwyn, a former U.S. diplomat and Energy Department official.
A month after signing a truce, Iran and the United States have slid back to open warfare. Conditions around the Strait of Hormuz, a vital waterway for oil and gas shipments, have deteriorated significantly after days of back-and-forth strikes.
With Iran attacking more ships, Mr. Trump announced on Monday that the United States would reinstate its blockade of Iranian ports. He also said he would charge a 20 percent fee on cargo transiting the strait, though a day later said he would “replace” the fees for “various” states in the Persian Gulf that invested in the United States.
His turnabout left key questions unaddressed and could stir more uncertainty for shippers. Oil prices soared in response. Brent crude, the international benchmark, was trading near $87 a barrel on Wednesday, its highest level in about a month.
“Even without a return to full-out combat, it might be hard to keep a lid on prices,” Clearview Energy Partners, a Washington research firm, warned in a note to clients.
Before the war, roughly one-fifth of the world’s oil passed through the Strait of Hormuz, making any threat to shipping a major concern for energy markets. But increasingly, analysts said, countries and companies are adapting to a new normal in which moving energy out of the Persian Gulf is fraught and, at least for a while, expensive. Countries like Saudi Arabia, the United Arab Emirates and Kuwait are increasingly seeking ways to avoid the strait by expanding pipelines or developing new ones, costly endeavors.
“There will be a geopolitical risk premium on oil and gas prices in the future,” said Jorge León, a senior vice president with Rystad Energy, a consulting firm.
After the war began on Feb. 28, with joint strikes by the United States and Israel, Iran effectively closed the Strait of Hormuz to ships from most countries. Global oil prices rose, of course, reaching around $100 per barrel a week into the conflict.
Then on April 13, the United States put in place its first blockade, prompting oil prices to shoot above $120 per barrel by the end of the month, the highest since the conflict started.
But slowly prices sank again. By the time the United States and Iran signed the short-lived memorandum of understanding ending hostilities in mid-June, oil was trading around $80 a barrel. Prices eventually dropped even further as a growing number of vessels sailed through the strait.
For Iran, the effect of the blockade was dire. Oil exports through the Strait of Hormuz accounted for about 80 percent of total Iranian exports. The United States choked off more than 1.5 million barrels per day — amounting to billions of dollars. Squeezing Tehran’s most important source of income put pressure on Iran to agree to the cease-fire, analysts said.
And yet Iran also acquired some advantages during that time. As part of the agreement, Mr. Trump granted a temporary waiver to sanctions that allowed for the sale of Iranian oil and an agreement to lift the blockade. Those measures gave Iran “valuable breathing space,” said Robin Brooks, a senior fellow at the Brookings Institution, a Washington-based think tank.
Iran exported around 45 million to 50 million barrels of crude oil after Mr. Trump lifted the first blockade, according to data provided by Rystad. That translates into billions of dollars that went to replenish the government’s coffers.
That was made possible, Mr. Brooks noted, because Iran was using empty tankers to store oil around the strait.
“The big mistake that was made in the first round of the blockade was to allow empty Iran tankers into the gulf,” he said, adding that the Trump administration “definitely can’t do that again.”
He and others speculated that Iran might be in a better position now to ride out the effects of a new blockade.
The Trump administration, according to Mr. Goldwyn, the former U.S. government official, is essentially trying to convince the oil market that the United States has control over the strait. And, he noted, ahead of critical midterm congressional elections in November, Mr. Trump is also facing political pressure to keep prices at heel.
“The Iranians can take this pain well past November,” Mr. Goldwyn said, adding, “The question is, can the Trump administration?”
