One decision in Washington could disrupt 20% of the world’s oil supply. From Iran’s response options to Pakistan’s economic exposure, the stakes stretch far beyond the Middle East.
At a moment of intense global attention, President Donald Trump faces one of the most consequential strategic decisions of his presidency. Iran’s internal unrest, driven by sustained protests and a harsh state crackdown, has intersected with long-standing tensions over Tehran’s regional influence, missile program and nuclear ambitions. Against this backdrop, the White House has confirmed that Trump has been presented with a spectrum of options ranging from intensified economic pressure to cyber operations and limited military action, all while publicly insisting that diplomacy remains preferable but not unconditional.
Trump’s posture reflects a calculated ambiguity. On one hand, he has voiced overt support for Iranian protesters and warned Tehran that repression will not go unanswered. On the other, U.S. officials emphasize that Washington seeks to avoid a regional war that could destabilize allies and damage global markets. This balancing act mirrors a broader strategic dilemma: applying enough pressure to alter Iranian behavior without triggering a response that spirals beyond control.
Economic pressure remains the most immediate and politically manageable option. The administration has revived and expanded secondary sanctions, including punitive tariffs on countries that continue to trade with Iran, particularly in the energy sector. The objective is not merely to hurt Iran’s economy but to isolate it from the global financial system by raising the cost of doing business with Tehran. Oil exports, historically Iran’s economic backbone, remain the primary target. Despite sanctions, Iran has continued exporting discounted crude, largely to Asian buyers, storing millions of barrels at sea when ports or buyers hesitate. This floating storage reflects both Iran’s resilience and the fragility of global energy enforcement mechanisms.
While sanctions dominate public discourse, military planners have also briefed Trump on limited kinetic options. These include precision airstrikes against IRGC facilities, missile bases or nuclear-linked infrastructure, designed to degrade capabilities rather than initiate regime change. Cyber operations occupy a parallel space, offering plausible deniability while potentially disrupting Iranian command networks, radar systems or logistics chains. Yet each option carries inherent risk, particularly given Iran’s well-developed asymmetric playbook.
Tehran’s likely responses form the core of Washington’s strategic anxiety. Iranian leaders have repeatedly signaled that any direct U.S. attack would not go unanswered. Retaliation could take many forms, from missile strikes on regional U.S. bases to proxy attacks via allied militias across Iraq, Syria, Lebanon or Yemen. However, the most consequential lever at Iran’s disposal lies not on land, but at sea.
The Strait of Hormuz remains the world’s most critical energy chokepoint. Roughly one-fifth of global petroleum consumption and more than a quarter of seaborne oil trade pass through this narrow corridor daily. Even temporary disruption would send shockwaves through energy markets and shipping networks.
[Embed Chart 1 here – Oil Flow Through the Strait of Hormuz]
| Year | Average Daily Oil Flow (million bpd) | Share of Global Oil |
|---|---|---|
| 2020 | 19.1 | ~21% |
| 2021 | 19.4 | ~20% |
| 2022 | 21.4 | ~21% |
| 2023 | 21.4 | ~20% |
| 2024 | 20.3 | ~20% |
| Q1 2025 | 20.1 | ~20% |
Source: U.S. Energy Information Administration, maritime tracking data
This data illustrates why even the suggestion of closure moves markets. Iran does not need to fully block the strait to create chaos. Limited harassment of tankers, deployment of naval mines, or the seizure of a single vessel could drive insurance premiums sharply higher and slow traffic enough to constrict supply.
Markets have already shown sensitivity to geopolitical signals emanating from Tehran and Washington. In recent months, Brent crude prices have reacted sharply to headlines, rising on fears of escalation and falling when tensions appeared to cool.
[Embed Chart 2 here – Brent Crude Price Movements During Heightened Iran Tensions]
| Period | Brent Crude (USD/barrel) |
|---|---|
| Jun 2025 | ~74 |
| Nov 2025 | ~63 |
| Jan 2026 peak | 69–74 |
| Jan 12, 2026 | ~63.9 |
| Jan 13, 2026 | ~59.5 |
Source: Reuters energy market data
These fluctuations reflect risk pricing rather than physical shortages, but they offer a glimpse of what sustained disruption could produce. Analysts widely agree that a prolonged Hormuz crisis could push oil prices toward or beyond $100 per barrel, particularly if alternative routes and spare capacity fail to compensate.
The shipping industry would be among the first to feel the impact. War-risk insurance premiums for tankers transiting the Gulf would surge, raising transport costs across the energy supply chain. Some vessels would reroute around Africa’s Cape of Good Hope, adding up to two weeks of travel time and effectively reducing global shipping capacity. Container congestion would increase in major ports, while freight rates would rise across unrelated trade routes due to knock-on effects.
For energy-importing countries, the consequences would be immediate and severe. Pakistan stands out as particularly vulnerable. The country relies heavily on imported oil and gas for power generation, transport and industry. A sharp rise in crude prices would widen Pakistan’s trade deficit, fuel inflation and pressure foreign exchange reserves. Higher energy costs would cascade through food prices, manufacturing inputs and public transport, intensifying domestic economic stress at a time when fiscal space is already constrained.
Beyond economics, Pakistan would face a diplomatic tightrope. Islamabad maintains pragmatic ties with both Washington and Tehran, balancing regional security concerns with economic realities. A U.S.–Iran confrontation would complicate this posture, forcing Pakistan to navigate sanctions exposure, energy sourcing challenges and domestic public opinion, which tends to oppose foreign military intervention in the region.
Other Middle Eastern states would face similar dilemmas. Gulf Arab economies, despite political rivalries with Iran, remain deeply exposed to shipping disruptions and oil market volatility. Saudi Arabia and the UAE possess limited alternative export routes, but these cannot fully offset Hormuz volumes. As a result, regional governments have quietly urged restraint, even as they support international pressure on Tehran.
Iran itself would not escape unscathed from a Hormuz crisis. While disruption offers leverage, a sustained closure would also choke Iran’s own oil exports and risk provoking a multinational naval response. This mutual vulnerability explains why Iran historically favors calibrated escalation over outright blockade. The use of proxies, deniable maritime incidents and rhetorical threats allows Tehran to raise costs for adversaries while preserving room for de-escalation.
For Trump, the strategic calculation hinges on whether pressure will fracture the Iranian regime or consolidate it. History suggests that external threats often strengthen hardliners, while economic pain alone rarely produces immediate political change. Yet inaction carries its own costs, potentially emboldening Tehran and undermining U.S. credibility among allies.
What makes the current moment uniquely dangerous is the tight coupling between geopolitics and global economic stability. Energy markets, shipping flows and national budgets are all exposed to decisions taken by a handful of actors. A miscalculation in the Gulf could ripple through Asia, Europe and Africa within days.
As policymakers weigh their next moves, the Strait of Hormuz looms as both a weapon and a warning. It is a reminder that in an interconnected world, regional conflict rarely stays regional. Whether Trump chooses restraint, escalation or a hybrid approach, the consequences will extend far beyond Iran and the United States, shaping global energy security and economic stability for years to come.
Energy security analysis: www.worldatnet.com/global-energy-security
Pakistan economic outlook: www.worldatnet.com/pakistan-economy
Council on Foreign Relations – U.S.–Iran conflict tracker: https://www.cfr.org/global-conflict-tracker/conflict/confrontation-between-united-states-and-iran
Reuters oil market coverage: https://www.reuters.com/business/energy/
U.S. Energy Information Administration – Hormuz data: https://www.eia.gov
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