Energy & Environment

Iran ‘toll booth’ on Strait of Hormuz underscores its leverage on Trump, US

Comments:

by Rachel Frazin - 04/03/26 6:00 AM ET

Comments:

Link copied

by Rachel Frazin - 04/03/26 6:00 AM ET

Comments:

Link copied

NOW PLAYING

Tehran’s control of the Strait of Hormuz is complicating President Trump’s exit strategy from the Iran war.

Trump in a Wednesday night address to the nation dismissed concerns about the strait, asserting that the U.S. produces enough oil to sustain itself and that other countries more dependent on Middle Eastern oil should be responsible for easing the passage of oil tankers.

Yet oil is a globally traded commodity, meaning the U.S. will not be immune to higher prices if Iran uses its leverage to control the 20 percent of the global supply that moves through the narrow strait off its shore.

And Iran increasingly appears to recognize that leverage, signaling its intention to institute a “toll booth” system that would exert a price on ships that want safe passage through the Strait of Hormuz.

Meanwhile, news outlets reported this week that Iran’s Islamic Revolutionary Guard Corps is taking tolls and allowing some friendly ships to pass through the strait. Previously, Iran had been successful in effectively halting flows of oil and other goods through the strait for the duration of the conflict.

Ultimately, if at least some oil gets through the strait, it may soften prices to a degree, but it’s also the latest flex from Iran on this key pressure point.

In the U.S., polls show the Iran war is unpopular and the surge in prices at the pump is likely not helping the situation.

Trump on Wednesday sought to soothe the public, but it’s far from clear his words will have their desired effect as Republicans grow more worried about the midterm elections.

“The United States imports almost no oil through the Hormuz Strait and won’t be taking any in the future,” Trump said. “We don’t need it.”

He also encouraged countries that do get their oil from the Middle East to “take care” of the situation.

“They must grab it and cherish it. They can do it easily. We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on,” Trump said.

After his remarks, oil prices jumped, something analysts attributed to dashed hopes that the president would outline a way out of the conflict.

U.S. benchmark West Texas Intermediate was trading at nearly $112 per barrel on Thursday afternoon, up from about $98 prior to Trump’s remarks.

Prices at the pump, which averaged about $4.08 per gallon in the U.S. on Thursday, could soon follow suit.

Some observers gave a relatively cool reaction to Trump’s address, while suggesting they were hoping for signals the war would be winding down.

“I think there’s disappointment. I think people were looking [for] at least an end date, even if they were skeptical about the plan for an off-ramp. They were expecting some sort of mention of an off-ramp, and there was not,” said Tom Kloza, chief oil analyst for Gulf Oil.

“I think if you don’t get mention of an off-ramp, you start to speculate that there’s going to be an escalation,” he said, predicting that gasoline prices could rise in the next few weeks to between $4.20 and $4.50 a gallon.

“It will continue to be top of mind, and it will continue to be a headline on virtually every day in April,” he said.

Patrick De Haan, head of petroleum analysis at GasBuddy, similarly expressed that oil markets rose because the president didn’t articulate a plan to restart oil flows through the strait.

“There’s not really a clear plan on trying to get oil flowing through the Strait of Hormuz, which is certainly not terrific, and as a result, I think we’re probably just a couple of days away from eventually seeing diesel prices reach record levels in the U.S.”

On gasoline, De Haan projected that gasoline prices could rise between 15 and 35 cents per gallon unless Trump changes course.

The high prices increase the pressure on the president to find a resolution to the conflict — one that involves opening up the Strait of Hormuz.

However, both the administration and Tehran are sending mixed signals about the potential duration of the conflict.

Earlier in the week, President Trump said that Iran requested a ceasefire — something the country denied. Meanwhile, Trump has also said the conflict could last for a few more weeks.

In his speech Wednesday, the president indicated his belief that the price of the conflict would ultimately be worth it.

“This is a true investment in your children’s and your grandchildren’s future,” he said.

Add as preferred source on Google