Iran's options to escalate amid US economic threats

Iran's strategic options for escalating its response to U.S. economic threats are narrowing, with a focus on further disrupting global energy flows. The country has already significantly impacted traffic through the Strait of Hormuz, a vital waterway for global energy transport, by launching attacks and issuing threats against shipping.

Mohsen Rezaei, a former Revolutionary Guards chief, has warned that "not a single drop of oil will be exported" if the economic war continues. While some oil tankers have navigated the strait recently, Iran has blacklisted 45 tankers for non-compliance with its imposed rules. These actions have repeatedly pushed up oil prices during the ongoing conflict.

Adding to the pressure, Iran's Houthi allies in Yemen have restricted Red Sea shipping. Although initial attacks only halted some vessels, Chinese shipping companies are now rerouting away from the Bab el-Mandeb strait. Further attacks, like those near Saudi Arabia's Yanbu oil terminal and the Suez Canal, could heighten oil market anxiety and crude prices.

Iran has also threatened retaliation against neighboring countries supporting U.S. efforts to cripple its economy. It has targeted Gulf states and Jordan with attacks, primarily aimed at U.S. bases but also hitting energy infrastructure. Intensified attacks on oil and gas facilities could further drive up energy prices, inflicting political damage.

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If the economic war continues, ⁠not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf.