THE international community wants an early and peaceful settlement of the ongoing conflict in the Gulf but several moves and developments on Tuesday raised the specter of stalemate for a prolonged period, which invariably mean continuation of the economic strains for almost all countries of the world. President Trump has reportedly directed his aides to prepare for a prolonged blockade of Iran, opting to intensify economic pressure rather than escalate militarily or disengage from the conflict. And reports from Tehran say Iran is now focusing on land routes for global trade as part of the strategy to ease pressure on its economy caused by American naval blockade of its ports. In a related development, members of the Gulf Cooperation Council (GCC) are opting for a unified regional security stance by declaring that any attack on a member state will be considered as an attack on all Gulf countries.
No doubt, behind-the-scenes diplomatic efforts are continuing to encourage the two sides to strike an acceptable deal but inflexibility on critical issues is an indication they are digging up for a prolonged conflict. However, it is important to note that neither the United States nor Iran is talking in terms of military engagement, strengthening prospects for maintenance of the temporary ceasefire. A report in the Wall Street Journal says in recent meetings, President Trump opted to continue squeezing Iran’s economy and oil exports by preventing shipping to and from its ports, targeting the country’s coffers in a high-risk bid to compel a nuclear capitulation Tehran has long refused. According to the report, the US President judged that alternative options – resuming bombing or stepping away from the conflict – carried greater risks. It is clear that despite insistence of the mediators to lift the blockade, which Iran considers as a grave violation of the ceasefire, the United States plans to expand it in its bid to realize its objectives through economic coercion. The US government also ratcheted up pressure on Tehran on Tuesday, imposing sanctions on 35 entities and individuals for their roles in Iran’s shadow banking sector and threatened sanctions against banks doing business with Chinese “teapot” refineries that it said are paying tolls for shipments to cross the Strait of Hormuz. It was in this context that President Trump claimed he received a report from Iran that it was in a ‘state of collapse’ due to the economic strangulation. Iran has not responded to the claim but going by the fact that the country not only survived but was able to strengthen its defence despite crippling sanctions, the economic collapse could turn out to be wishful thinking as Iran has options to withstand pressure. As a counter-move and sign of defiance, Tehran was using northern, eastern and western trade corridors that did not rely on Gulf ports to neutralize the blockade’s effects. It is also believed that President Trump was unlikely to accept Iran´s proposal to restore traffic in the strait, as Qatar warned of the possibility of a “frozen conflict” if a definitive resolution is not found. Iran is proposing formalization of its control of Hormuz and imposition of transition free but GCC leaders have rejected any fees on vessels passing through the Strait of Hormuz and called for ensuring free and secure navigation in the strategic waterway. Iran is likely to review its proposal it has already transmitted to the United States via Pakistan and it is to be seen whether or not it will help build consensus among stakeholders. The widely-held belief that the post-Iran war world will be much different from the pre-war period is becoming a reality in view of security related moves of the GCC countries and decision of the United Arab Emirates (UAE) to quit to the Organization of the Petroleum Exporting Countries and the wider OPEC+ alliance from May 1, 2026. Among other factors, the move is influenced by implications of the war that require greater investments for rebuilding of the damaged infrastructure and the exit from OPEC will allow UAE to make independent decisions about oil production and exports.
