Why Trump’s Blockade Isn’t Working (yet)

本站添加: 2026-05-08

[00:00:00]A week or so ago, US officials were sounding remarkably confident about the ongoing blockade of Iran. Treasury Secretary Scott Bessant, for instance, claimed on X that the blockade would lead to gasoline shortages inside Iran.

[00:00:13]And Trump himself suggested that Iran's oil wells would soon start to quote explode. However, with no explosions in sight, oil prices surging, and Iranian officials showing no sign of backing down, the mood music has suddenly turned. Trump has once again taken to Truth Social to threaten Iran with AI generated memes. And on Wednesday, Axios reported the US was considering restarting the war. So, in this video, we're going to explain why the blockade isn't working, at least not yet, and what might happen next.

[00:00:51]If you love staying informed and want some of the best reporting on YouTube, then subscribe and ring the bell for more. So, to understand why the blockade isn't working, you need to understand what it was intended to do in the first place. Broadly speaking, the blockade had what we might describe as two immediate or tactical objectives and one overarching or strategic objective. The first tactical objective was to inflict damage on Iran's economy by limiting Iran's access to imports and more importantly limiting its ability to export oil. For context, after the war kicked off, Iran was basically the only Gulf country that was able to continue exporting at its pre-war rate. In fact, before the blockade, Iran was actually making more in oil revenues than it had been beforehand. both because oil prices were surging and because in an attempt to bring them down, the US lifted some sanctions on Iran's oil industry, which meant Iran no longer had to sell its oil at a discount. This is why Iran's currency, the real, which has been falling pretty steadily for the past couple of months, actually appreciated against the dollar in the first few weeks of the war. Trump would have presumably been hoping that the blockade would Iran's oil exports, thus cutting off Iran's main source of foreign currency. reversing any appreciation in the real and crippling the wider economy. The second tactical objective was to force what's known as shutins in Iran's oil industry. In short, if Iran can't export its oil, then it has to put the oil that it's still pumping and that isn't being consumed domestically into some sort of storage. Once they run out of storage, however, they then have to somehow cail production. The problem here is that suddenly halting production at an oil well or field, otherwise known as a shutin, is not easy. The reasons are complicated and well dependent. In other words, some shutins are easier than others. So, we're not going to go into it in too much detail here, but the basic idea is that shutins can both damage existing infrastructure and permanently reduce productive capacity with the risks increasing the longer any shut-ins last. Anyway, the plan here is to basically block Iran's oil exports for long enough that Iran is forced into these sort of shutins. Finally, what we might call the overarching or strategic objective with the blockade is to use this economic pressure and the threat of shutins to force the Iranian regime to make more concessions in upcoming negotiations.

[00:03:13]So, those are the three objectives. But is the blockade actually delivering on them? Well, on the first one, it does seem to be sort of working. Since the blockade, the real has plunged, falling more than 10% against the dollar to an all-time low in barely a couple of days.

[00:03:30]Unsurprisingly, this depreciation, plus the wider disruption from the war, has been bad news for the Iranian economy, which wasn't in great nick to begin with. Annual inflation, which was running above 40% before the war, has now ticked up to 50%, according to the central bank. Unemployment is rising and the government has been forced to dip into its sovereign wealth reserves to fund essential imports of food stuffs.

[00:03:54]When it comes to the second objective, however, the blockade is apparently falling short. While the blockade has clearly succeeded in limiting Iran's oil exports, there's little evidence to suggest that Iran's oil industry is on the brink of the sort of catastrophic shutin that Trump was apparently hoping for. The basic problem here seems to be that the US underestimated how long it would take before they were forced to cail production and overestimated how much damage any shutin would actually do to Iran's industry. On the 26th of April, for instance, Trump told Fox News that Iran's wells would start to quote explode in about 3 days and that Iran would never be able to fully rebuild the affected wells. But what you're referring to is that when when you have, you know, lines of vast amounts of oil pouring through your system, if for any reason that line is closed because you you can't continue to put it into containers or ships, which has happened to them, they have no ships because of the blockade. What happens is that line explodes from within both mechanically and in the earth. It something happens where it just explodes. They say they only have about 3 days left before that happens. And when it explodes, you can never, regardless, you can never rebuild it the way it was. In other words, it will always be, if you rebuild it, it's hard to rebuild it all, but it would only be about 50% of what it is right now. So, it's a very powerful thing that takes place, sort of having to do with nature. But when when that gets clogged at the end, in other words, when you have to turn it off because you have no place to store this oil, either put it on ships or storage tanks, which they are just about finished with, uh, a very bad thing is going to happen.

[00:05:40]>> But 3 days have now passed since that interview, and there's little evidence to suggest that Iran's industry is about to, in Trump's words, explode. There have been some signs of overprouction.

[00:05:50]There was, for instance, some so-called flaring in Iran's Kazan province. a couple of days ago, which is basically when producers start burning off excess oil or gas to avoid a shutin. But Iran has been able to avoid any proper shutins so far. And Capller, a commodity intelligence firm, now reckons that Iran still has about 2 weeks worth of storage available. This is in part because Iran has been able to lean on unorthodox storage methods like mothball tankers, but also because while Iran's oil industry is generally pretty decrepit, avoiding and managing shutins is almost the one thing they're good at because they've had to do it a couple of times in the recent past. After the US escalated sanctions in 2013 and then again in 2019, Iran's exports collapsed and they were forced to suddenly cut production. Both times, however, they were able to pull this off without much damage to productive capacity, let alone any explosions. In fact, Iran's total petroleum output, including not just crude oil, but also condensate and natural gas, hit a 46-year high last year, which is more evidence to suggest that even a prolonged shutin like the one we saw after 2019 wasn't enough to permanently damage productive capacity.

[00:06:59]Furthermore, it's worth noting that a prolonged closure of the Strait of Hormuz also increases shutin related risks for America's Gulf allies. And Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar have already collectively shut in more than 11 million barrels a day of oil production. You get the idea. Iran has survived this sort of thing before, which is why, and this takes us on to that third objective, Iranian officials are showing no signs of backing down at the moment. They are apparently betting that Hummer's related disruption to oil markets and the global economy, plus growing irritation amongst America's allies, will force Trump to blink before Iran is forced into the sort of catastrophic shutins that Trump is angling for. They might be right, they might not. But the big risk here is that both sides might conclude that time is on their side, which means we could very plausibly sleepwhawk into a worst case scenario for the global economy. So, you're probably wondering what's next for this story and how it's going to develop over the coming days and weeks.

[00:07:59]But it might be overwhelming trying to sift through the thousands of news articles trying to find one that you can trust not to feed you a false narrative.

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