Hormuz Strait Halts 'Extorting the Global Economy,' Says Former State Dept. Official

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Heather Conley, senior fellow at the American Enterprise Institute, said the US blockade of Iran in the Strait of Hormuz is a temporary measure and won't remove all threats to shipping in the area. Shipping through the Strait of Hormuz slumped back down again Monday, reversing a jump on Sunday, as caution mounted ahead of a US naval blockade. While 19 vessels went through in either direction on Sunday — the most since the early stages of the war — the momentum reversed by Monday morning. Only four were observed passing on Monday: a single liquefied petroleum gas carrier was sighted entering the Gulf, and three small fuel tankers were racing to exit just hours before the blockade took effect at 10 a.m. New York time. There had been signs that oil exits were picking up in the world’s most important oil channel over the weekend when three oil supertankers got through on Saturday and the US and Iran held peace talks in Islamabad.  Those negotiations subsequently broke down, with the US then pledging to intercept, divert or capture ships leaving Iran. Tehran, meanwhile, warned it would target all ports in and close to the Persian Gulf if its own shipping hubs are threatened, highlighting the escalation risks. US President Donald Trump said in a post on social media that 34 ships navigated it on Sunday. The US blockade may prompt more ships to cut their tracking signals to avoid detection in high-risk shipping lanes, making it even harder to get an accurate picture of what’s going through.   Frustrated by Iran’s unwillingness to give up its strangehold over the Strait of Hormuz, US President Donald Trump is trying to force the issue. The US military announced that it had imposed a full blockage of Iran’s southern coastline, including traffic from there through the Strait of Hormuz, as of April 13. The narrow waterway connecting the Persian Gulf to the wider world has become a flashpoint since the US and Israel began strikes on Iran on Feb. 28. Tehran tightened its grip on the corridor in response, all but closing off a vital thoroughfare and threatening economies far beyond the Middle East. A US naval blockade along the lines of what was carried out off Venezuela from the end of last year could reduce that to zero, pressuring Iran but also putting additional stress on energy supplies, especially for Asian nations that depend heavily on the Middle East for them.  It would also likely doom an already fragile ceasefire the warring parties agreed to on April 7.  What exactly is the US navy doing? Hours after US-Iran talks in Islamabad aimed at a permanent resolution of the war fell apart on April 12, Trump posted on social media that “effective immediately” the US Navy would blockade “any and all ships trying to enter, or leave, the Strait of Hormuz.” He added that other countries would participate, without naming any.  He threatened to “interdict every vessel in International Waters that has paid a toll to Iran,” implying the US could impose its blockade widely, well beyond the strait and even in the waters of the Gulf of Oman. The US military separately issued a more narrow interpretation as it set a start of April 13 at 10 a.m. New York time for the blockade. It applies to all vessels “entering or departing Iranian ports and coastal areas.”  The US said that neutral ships that haven’t called at Iran would not be impeded, though they may be searched for contraband cargo. Seafarers are advised to monitor official broadcasts and contact US naval forces when in the Gulf of Oman and approaching the Strait of Hormuz, it added. A UK naval group that liaises between the military and civilian shipping interests said it had been informed of the US restrictions and added that additional guidelines, including routing, verification and authorized transit procedures were being developed. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X: https://twitter.com/BloombergRadio Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake