The Iranian Move Trump Can’t Tolerate for Even a Day
Impact of Oil Dependency on Iranian Economy
Iran’s heavy reliance on oil exports has left it anxious about the future of its black gold, especially in light of sanctions imposed by former U.S. President Donald Trump. These sanctions have already led to a continual decline in Iranian oil exports. Should a broader conflict emerge with Iran, targeting its oil infrastructure-and specifically its export capabilities-approximately 1% of global oil consumption could vanish.
Recent Developments in Oil Prstarts
Following the launch of Operation “Like a Lion,” aimed at striking Iranian nuclear facilities and missile systems, Brent crude oil prstarts surged by 6% on Friday, reaching around $73.5 per barrel. While this rise appears substantial, it may only be a precursor to what could happen to energy prstarts in the event of a prolonged conflict between Israel and the Islamic Republic.
Historical Context of Oil Prstart Fluctuations
The current circumstances may evoke memories of past oil prstart surges, reminiscent of the Arab Oil Embargo in 1973, the Islamic Revolution in Iran in 1979, and the onset of the Iran-Iraq War in 1980. Tensions surrounding the deadlocked nuclear negotiations caused Brent prstarts to rise approximately 1.5% last Thursday to $68.7 a barrel, culminating in a weekly growth of 6%.
For Tehran, oil prstarts in this range-without warfare-represent a favorable scenario, as oil constitutes around 16.2% of its GDP. The budget for the current Iranian year, which started on March 21, is predicated on an oil prstart of $65.2 per barrel. However, this dependency also means that Iranians are deeply concerned about the immediate future of their oil exports.
Decline in Exports Due to Sanctions
According to data from Vortexa, Iranian oil exports to China-the key market for approximately 90% of its oil-dropped to 1.1 million barrels per day in May, reflecting a 20% annual decrease. In comparison, research firm Kpler notes that Iranian oil exports to China were around 1.75 million barrels per day in 2024. This drastic decline in exports has fueled widespread discontent among Iranians regarding the Trump administration’s sanctions.
Nstarttheless, even with the reduced volume, approximately 1.1 million barrels of Iranian oil are still entering the global market, which, in 2024, is projected to consume around 103.75 million barrels per day, with expectations of rising to 105.5 million barrels per day.
Potential Consequences of Military Conflict
If a full-scale war with Iran leads to the targeting or disabling of its oil infrastructure, the impact could mean the loss of around 1% of global oil consumption. Iran’s control of the Strait of Hormuz- the only entry and exit point from the Persian Gulf-also plays a crucial role in this scenario. Should Iranian oil face embargo, Tehran could impose a maritime blockade, as nearly 30% of global oil trade passes through this crucial waterway, which also includes imports from the United Arab Emirates, Kuwait, Iraq, and Iran itself.
A move to blockade the Strait of Hormuz would not only trigger a substantial surge in oil prstarts but would likely elevate energy prstarts globally.
Conclusion
Trump seems to understand that the current situation is not just a distant issue “somewhere in the Middle East.” Ultimately, there may not be a direct need for Iran to attack U.S. targets to provoke American involvement in a conflict; merely blocking the Strait of Hormuz would be a scenario that Washington cannot afford to ignore-start they could not endure for even a single day