Trump’s Plan to Open the Strait of Hormuz? Close It

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1:57Bloomberg Audio Studios, podcasts, radio, news. The ceasefire between the U.S. and Iran is set to expire next week. And following an inconclusive round of peace talks in Pakistan, the U.S. is trying a different tactic to pressure Iran into a deal, a naval blockade. President Trump says the U.S. blockade in the Strait of Hormuz has begun. Two tankers under U.S. sanctions turning around as the restrictions went into effect. President Trump announcing that any Iranian who fires at us or at peaceful vessels will be blown to hell. The blockade was implemented Monday, further cutting off the Persian Gulf from the rest of the world.

2:38It seems as though President Trump has been saying, you know, the strait must be open, the strait must be open, the strait must be open, but we're going to close it in order to get it to reopen. Becca Wasser is the defense lead for Bloomberg Economics. But the logic, for at least what I can piece together, is the idea of this economic pressure on Iran is going to either force them to concede at, you know, the negotiating table right now, or over time, that pressure is going to lead them to make some of those concessions, to agree to terms that the U.S. feels quite strongly about. People familiar with the matter told Bloomberg that the U.S.

3:18and Iran are in talks about holding a second round of negotiations in the coming days. And Becca says the blockade only raises the stakes. The risks here are really the escalation risks in an already fragile ceasefire in a really fraught conflict. And that could ratchet up tensions further at a time where it does seem as though there are some signals from all sides to try and de-escalate slightly.

3:48I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, how the U.S.'s naval blockade of the Strait of Hormuz works, what could happen if it's tested, and how this latest pressure tactic could influence another round of Iran-U.S. peace talks.

4:09Becca, my first question for you is just what is the status of the U.S. blockade in Iran? What do we know about what's actually been set up so far? President Donald Trump said that it was a total blockade in the vein that he said for Venezuela, in which it would be almost all ships. But U.S. Central Command issued a more restrictive definition of the blockade, where they said that they were going to blockade all maritime traffic intending to enter Iranian ports, both in and outside the Persian Gulf. But it said that it would enforce the blockade not in the strait itself, but right outside it. So that would be in the Gulf of Oman.

4:49That would be into the Arabian Sea. And that starts to get you closer towards the coastlines of various Gulf countries. I've seen reporting that the U.S. is deploying as many as 15 ships to create this blockade. What is their role here? So I think a lot of folks think of a blockade as a cordon, that you're going to have a group of ships stopped at the end of the strait, no one can go past. But that's not likely exactly what's going to happen. I think what you are going to have is constant monitoring of the strait, which the U.S. is likely doing with various intelligence, surveillance and reconnaissance assets, potentially even space-based assets, as well as potentially even communication with those ships.

5:34And whenever there's any vessel that the U.S. thinks might be headed for Iran or coming from an Iranian port or is part of, you know, the shadow fleet or sanctioned vessel, you know, they'll communicate with them and they will try and get more information. But also, in many respects, try to issue warnings and say that if you proceed, you will most likely be interdicted. And this means that either the vessel is going to be diverted, either sent back, or there's the chance that it could be boarded and eventually seized. What might Iranians do to counteract this blockade? A blockade is technically an act of war, and there's a high chance that Iran sees it that way.

6:20You know, so that could mean that Iran might retaliate attacking Gulf ports and infrastructure in response. Right now, it seems as though there's a chance that communication and diplomacy is still alive. And that might give Iran pause on any type of potential retaliation. However, I think it's notable where the U.S. has said that the blockade area is going to be. What they've done is they've tried to take some of the ships and move them a little bit further away from some of the potential threats in the Strait of Hormuz. That doesn't negate any, all of the threats. You know, some of the U.S. warships could still be at risk of drone attacks or anti-ship cruise missile attacks, but it's taken it away out of the most threatening geography.

7:09And I think you do see a little bit of positioning on both sides right now to leave some space for communication and to leave some space for diplomacy to hopefully bear fruit. I want to talk a little bit more about how the U.S. might enforce this blockade. What do we know about enforcement here? I think some of the bigger unknowns right now are really whether the U.S. is going to take the narrow interpretation of a blockade that U.S. Central Command put forward or whether they're going to try and implement what President Trump initially tweeted, which is the idea of interdicting every vessel in international waters that paid a toll to Iran.

7:54If that is the case, then you're likely to see a lot more U.S. operations outside of the Middle East. That's when you could see the U.S. trying to interdict vessels that are in the Indo-Pacific, perhaps maybe some of those dark fleet vessels that are trying to ship oil to China. And that in itself opens up a potential host of other questions, as well as some potential risks. In some ways, it seems counterintuitive, maybe, that in order to achieve one of the military aims here, which is reopening the Strait of Hormuz, the Trump administration is essentially closing traffic near the Strait of Hormuz.

8:35Can you explain the logic there? The logic, for at least what I can piece together, is the idea of this economic pressure on Iran is going to either force them to concede at, you know, the negotiating table right now, or over time, that pressure is going to lead them to make some of those concessions, to agree to terms that the U.S. feels quite strongly about. But in order to create that pressure, the U.S. needs to essentially exert it, which by their calculation is the best way that they could do so is to enforce a counter blockade, if you will, of what Iran has been able to do in threatening to close the strait and essentially freezing all traffic.

9:28So how could the blockade affect negotiations between Iran and the U.S.? And what is Israel's role? That's after the break.

9:47The closure of the Strait of Hormuz has snarled global oil supplies and become a key flashpoint in negotiations between the U.S. and Iran. To understand how the U.S.'s naval blockade could affect talks moving forward, I called up Bloomberg's Middle East breaking news editor, Patrick Sykes. So, Patrick, Iran has denied the world access to the Strait of Hormuz. Now the U.S. is attempting to deny Iran access to the rest of the world by placing this naval blockade on Iranian ports. I'm wondering how you read this move. Does it look like a knee-jerk reaction to the failure of the first round of peace talks between Iran and the U.S.?

10:26Or is it part of a bigger plan for this war? In Iran, it's interesting. It's been framed as a kind of third way, right? The choices that the U.S. had, crudely speaking, were to strike a deal or to go back to war. And this Iranian media are reading as an attempt to find an alternative way through that. I think related to it, it's definitely seeking to deny to Iran this asymmetry around the whole Strait of Hormuz situation, right? the fact that Iran, with relatively limited military capabilities, in some cases just the threat of an attack or the general instability around the war, was able to, as you say, deny access to others while maintaining access for itself and reaping the rewards of those higher oil prices in the process.

11:19So the US, in doing this latest move, is trying to cut off at least the new flow of cash to Iran that it's been able to generate. And how do you see the blockade sort of fitting into the US's overall negotiation strategy then? It's a pressure move, right? It's not the kind of thing that's gonna, I think, make Iran either run back to the negotiating table nor to abandon talks altogether. In their minds, you know, this is still a fight for survival. And they claim they have alternative routes. They might be able to, you know, send some limited volumes over land. They might be able to draw on ports that are less exposed to the strait as such.

12:03So I think they will try to resist and they'll make the best of that newly limited situation. And I mean, as a move intended to put pressure on Iran, I'm wondering how this naval blockade compares to something like a ground invasion that Trump has been threatening? Is this a preferable escalatory move that avoids troops on the ground? I think for the US, for sure, right? We have to assume that while no doubt ground options were among those presented to the president in Washington, it obviously comes with huge risks, the kinds of risks that what's largely been an air campaign so far don't have, right, from the US defence planners perspective, this was quote unquote, the beauty of the campaign so far that from a relative distance, and with relatively few from their perspective casualties, they were able to cause widespread destruction to the enemy.

13:05That whole equation changes if you're there on the ground, if you're actually on enemy territory. I think that the real test of it would be what happens if a ship tries to challenge the authority of this blockade, right? Because then you may end up in territory where you're looking at conflict on the water. We've had the Venezuela precedent a few months back, where we had ships deliberately trying to evade that blockade, and the US having to chase after them. So there's both kind of reputational risks and obviously more plainly military risks as and when they're challenged. I mean, from Iran's perspective, is that something they're willing to do to challenge this blockade?

13:54I mean, with the timescales that we're operating in, right, this ceasefire is supposed to end early next week. So we have to assume that the sides will try and arrange another round of talks by then. So if we're looking at another round of diplomacy, and best case scenario, a deal by the end of the week, Iran has suffered this situation for a couple of days at that point. And that is definitely something that they're very happy to swallow. Longer term, obviously, as the duration of any blockade increases, it becomes more and more painful. And that's in the context of an economy that's already even before the war, you know, been, the currency has been in freefall, inflation over 30%.

14:39And the war is just obviously added to that in terms of damage to civilian infrastructure, disruption to businesses and ordinary people's lives. But I think both sides are making that calculation, right? Iran is also making the time calculation that the US doesn't want this to drag on. And U.S. consumers, U.S. buyers of gasoline don't want this to continue. A lot of what comes next here depends on how quickly and how well peace talks go between Iran and the U.S. I want to talk about the state of negotiations a little bit more. What kind of progress can we say was made during that first round of talks?

15:20I think the progress might be structural, if anything, right? These were, regardless of the contents, at the format level, these were the highest level talks between American and Iranian officials in a very, very long time, right? These are obviously two countries that have been sworn enemies largely since the 1979 revolution. So it is extremely rare for the Speaker of the Parliament, the head of one of the three branches of government, who's also thought to be a key decision-maker in the defense establishment to be there on the other side of the table as the American vice president. That in itself was remarkable.

15:58And I suppose we can only hope that with that contact at such a high level, the two sides got something of a sense of each other.

16:11I want to talk about another factor here, which is Israel, right? Iran has layered in a demand that Israel stop attacking Lebanon. Israel and the Lebanese government are engaging in their own talks this week in D.C. So, Patrick, what roles are Israel and Iran's proxies playing in this negotiation process right now? Yeah, it was really interesting. On the day of the Islamabad talks, you know, the Iranians came, they turned up, and they kind of started the process with this initial meeting with the Pakistani officials. But it was only once they claimed that Israel had pulled back on a limited, some of its strikes on Lebanon, that the Iranians said that they're happy to go ahead, enter the actual room and start talking with the Americans.

16:57They were very keen to make that a condition of their participation. Now, it's worth stressing, I think the US pushed back on that account of things. but it does underline that Iran wants this to be the end of not just the conflict in Iran right now but the end of future aggression both against Iran and against those regional allies allied militias that it has like Kezbollah in Lebanon like the Houthis in Yemen because from Iran's perspective Iran feels it's been burned a couple of times now by this back and forth of diplomacy and then war. And it's really keen to restore deterrence so that there's some semblance of balance again in the region.

17:47At the same time, it's using whatever leverage it's been able to build up in this hot war with the US and Israel to kind of display, I think, a sense of solidarity with those regional militias like Hezbollah in Lebanon and so on. So it's very keen to present a united front that, if needed, it can activate again. But in peace also has to enjoy the peace dividend.

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