Iran threatens to block all Middle East oil; Trump weighs Russia sanctions relief

The Strait of Hormuz is 21 miles wide at its narrowest point, between Oman and Iran. Approximately 21 million barrels of oil per day pass through it — about 20 percent of global petroleum consumption and roughly 25 percent of total global liquefied natural gas trade. Iran threatened to close the strait during the Iran-Iraq War in the 1980s and during U.S.-Iran nuclear tensions in 2012 but never successfully did so. The IRGC's March 10 threat was the most direct since 2012 and came in the context of ongoing active military conflict involving U.S. and Israeli forces.

The Strategic Petroleum Reserve is a U.S. government stockpile of crude oil in underground salt caverns in 🎺Louisiana and 🤠Texas. Congress created it after the 1973 Arab oil embargo to give the president emergency energy supply authority. At full capacity it holds about 714 million barrels. As of early 2026, partial Biden-era drawdowns had reduced it and it had not been fully replenished. Energy Secretary Wright's indication that a release was being considered represented one of the most significant non-military tools the president could deploy without any congressional approval.

The Russia oil sanctions question was politically sensitive. The Biden administration, with the EU and G7, had constructed a sanctions architecture around Russian oil following the February 2022 Ukraine invasion, including a price cap mechanism designed to limit Russian oil revenue. Relaxing these sanctions to offset Iran supply losses would directly benefit Moscow — at a moment when Russia was simultaneously providing Iran with satellite targeting data on U.S. troops and ships, a fact Senator Whitehouse had detailed on the Senate floor on March 7.

Trump's warning to Israel not to strike oil and energy infrastructure on March 10 reflected the administration's own assessment of the 'doomsday option' — a scenario where Israeli strikes on Iranian oil facilities combined with an IRGC Hormuz closure to produce a simultaneous supply shock affecting every oil-importing nation. Saudi Arabia, the UAE, and Kuwait — whose own exports would be blocked — had refused to allow the U.S. to use their bases for Iran strikes, giving them leverage they had not previously exercised over U.S. military operations.

Pakistan's decision to deploy warships to escort its own merchant vessels illustrated how the war was fragmenting informal rules governing global energy transit security. Countries that could not rely on U.S. naval protection were developing independent arrangements. The fragmentation of oil transit security has long-term implications for the U.S. dollar's role as the global reserve currency, since oil is priced in dollars precisely because the U.S. Navy guarantees the security of oil transit routes — a guarantee now under active test.