Hormuz blockade is 'worse than war’: Iranian official says US blockade would cost Iran $18 billion

Majidreza Hariri, head of the Iran-China Joint Chamber of Commerce, issued a stark warning that the continuing American blockade of the Strait of Hormuz could inflict an annual economic cost of approximately $18 billion on Iran. He urged the nation not to become accustomed to the blockade, as it has with sanctions, and advocated for imposing the cost of lifting it on the U.S., even suggesting war as a potential means.

Hariri advised Iran to end the blockade by any necessary method, including negotiations, threats, or resuming conflict. His remarks follow reports that Iranian President Masoud Pezeshkian has begun exploring strategies to circumvent the naval blockade. Iran has significantly invested in infrastructure to bolster truck-based trade, aiming to increase bilateral trade from $3 billion to at least $10 billion, according to Interior Minister Eskandar Momeni.

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We must not get used to the blockade as we did with sanctions. We should impose the cost of lifting the blockade on the US, even through war.

However, Hariri contends that relying solely on land trade would restrict Iran's import and export capacity to just 20%. He also noted Iran's insufficient relations with many neighbors to support such a trade model. Based on his calculations, a container shipped from China to Iran would cost four times more by land than by sea, adding an average of $9,000 per container. With approximately two million containers imported annually, this translates to the estimated $18 billion in additional costs.

Hariri further warned that the increased cost of land transit could render non-oil exports, valued at around $50 billion annually, economically unviable. He stated that the naval blockade presents fundamental challenges, predicting the country's economy would grind to a halt if it persists. "Our total foreign trade is $100b. a year, and adding $20b. in costs to it would bring the entire process to a standstill," he said, adding that land transit is only a short-term solution for urgent necessities.

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The worst thing that could happen today is for us to think that we can circumvent the naval blockade and try to run the country despite it. We did something similar with the sanctions. Instead of lifting them or finding mechanisms to neutralize them, we turned to circumventing the sanctions, and the result was a weakened economy and major corruption.