Donald Trump wants to choke Iran’s economy. Iran says it can choke the world’s oil supply. That is the dangerous bargain now unfolding across the Strait of Hormuz.
Trump has announced an “Economic D-Day” against Tehran, urging American allies to shut down Iran’s oil-smuggling networks, cash transfers, exchange houses, ship registries and front companies. Iran’s reply arrived through Mohsen Rezaei, secretary of its Supreme National Security Council. Join Washington’s economic war, he warned neighbouring countries, and Tehran will treat you as an enemy.
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Then came the sentence oil markets cannot afford to ignore. “If the countries surrounding Iran join the Americans in the economic war, not a single drop of oil will leave the Persian Gulf and the Strait of Hormuz,” Rezaei told Iranian state broadcaster IRIB. He went further. Iran, he said, could also target alternative routes used to carry Gulf oil.
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In other words, Trump wants to turn Iran’s neighbours into participants in an economic blockade. Tehran is warning those same countries that their pipelines, ports and tankers could pay the price. Neither side says it wants another full-scale military escalation. Both are building one economic threat at a time.
WHAT IS TRUMP’S ‘ECONOMIC D-DAY’ AGAINST IRAN?
Trump has described the latest campaign as the “most crushing economic operation ever taken against any country”. “Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies. It all needs to stop now,” he wrote on Truth Social. “You know who you are. This will be an Economic D-Day, and we need all of our Allies to stand with the United States of America to isolate and defeat the Iran threat.”
The phrase may carry Trump’s familiar theatrical flourish, but the strategy is clear. Washington wants to squeeze every remaining channel through which Iranian oil and money move. Trump says the pressure is necessary to prevent Iran from acquiring nuclear weapons. Tehran maintains that its nuclear programme is peaceful and argues that successive American sanctions campaigns have failed to force it into submission.
Iranian Foreign Minister Abbas Araghchi dismissed “Economic D-Day” as another version of a strategy that has already failed. First Vice President Mohammad Reza Aref called it economic terrorism and said pressure would harden Iranian resistance. Rezaei supplied the threat behind that resistance. “We are not seeking to escalate the war,” he said. “But if the countries surrounding Iran join the Americans in an economic war, we will harm their interests.”
That is an extraordinary message to Iran’s neighbours, many of which depend on the United States for security while depending on the Persian Gulf for their economic survival. Trump is asking them to choose. Iran is explaining the cost.
WHO CONTROLS STRAIT OF HORMUZ?
The argument becomes even more combustible at the Strait of Hormuz. Rezaei insists the waterway remains closed and will not reopen until the United States fulfils its commitments and “corrects its behaviour”.
Trump claims the opposite. US Energy Secretary Chris Wright said more than 15 million barrels of oil and petroleum products had passed through Hormuz with American military support in a single day. Once pipeline shipments were added, he said, nearly 20 million barrels had left the region. “Make no mistake, thanks to the US Navy, oil is flowing through the Strait of Hormuz,” Wright wrote on X.
So, is the strait open or closed? The answer depends on whom you ask, and that is precisely the problem. Iran claims the right to decide when the waterway functions. Washington says its navy has restored the movement of energy shipments. Commercial traffic has increased, but it remains far below the levels recorded before the war.
Trump has even described Hormuz as “American territory”, a claim that Tehran immediately rejected. Rezaei countered that Iran possesses more than half the Persian Gulf coastline and should manage the strategic passage. Deputy Foreign Minister Kazem Gharibabadi said Trump’s claim would be corrected “by circumstances or by Iran”.
The rhetoric sounds almost absurd until you remember what runs through this narrow stretch of water. Before the war, roughly one-fifth of the world’s oil and liquefied natural gas moved through Hormuz. Any prolonged disruption can raise fuel prices, scramble shipping routes and send inflation through economies thousands of kilometres away. This fight is taking place in West Asia. The bill can arrive anywhere.
THE DEAL THAT DIDN’T DELIVER PEACE
There was supposed to be a way out.
Trump and Iranian President Masoud Pezeshkian signed a 14-point memorandum of understanding on June 17 after negotiations mediated by Pakistan. The agreement halted large-scale military operations and opened a 60-day window for talks towards a wider settlement.
That window has now closed. According to Reuters, Iran says the United States must lift its blockade of Iranian ports, ease oil sanctions, release frozen Iranian assets and stop military threats before Hormuz can reopen fully.
Washington and Tehran disagree over who violated the arrangement and which obligations remain binding. Pezeshkian insists Iran surrendered nothing. “We signed the memorandum of understanding because we believe that we cannot achieve anything through war,” he said during a speech marking Doctors’ Day. “We are not going to bow our heads and give in to the enemy. We can solve our problems with strength but with logic.”
Pezeshkian said Iran’s Security Council had regarded the MoU as the best available route out of the dangerous condition in which the country was trapped. “There is not a single clause in the memorandum that we have compromised,” he said. That reveals the contradiction within Tehran’s own message. Its president is defending negotiation as the only logical exit from war. Its security chief is threatening neighbouring oil routes if those talks give way to economic strangulation. One voice is holding the door open. The other is standing beside the oil valve.
AND THEN THERE IS ISRAEL
Israel remains embedded in every layer of the confrontation. Rezaei claimed Israeli Prime Minister Benjamin Netanyahu had persuaded Trump that an economic blockade could force Iran to surrender within months. No independent evidence was offered to support that assertion.
Iran has also widened its attack on the Western governments supporting Israel.
Gharibabadi accused France and the United Kingdom of participating in alleged Israeli crimes by continuing to supply weapons and other assistance. His comments followed an open letter signed by 102 former British and French diplomats urging London and Paris to sanction Israel. The signatories included former British ambassadors to the United Nations Jeremy Greenstock and Emyr Jones Parry, as well as former senior French diplomats Yves Aubin de la Messuzière and Denis Bauchard.
The former diplomats reportedly called for arms transfers and military cooperation to be halted, trade with Israeli settlements to be banned and international court decisions to be enforced. They accused Israel of pursuing policies that risk the “erasure of Palestine” and argued that settlement expansion, house demolitions and settler violence were destroying the possibility of a viable Palestinian state.
Gharibabadi seized upon the letter to accuse London and Paris of hiding behind expressions of concern while continuing to support Israel materially. The former diplomats do not speak for the British or French governments. Their intervention, however, gives Tehran another opening to argue that Western policy towards Israel is fuelling instability across the region.
THE ECONOMIC WAR WITH MILITARY CONSEQUENCES
Trump appears to have stepped back, at least temporarily, from a new wave of military strikes and turned towards economic pressure. Tehran is trying to make that strategy as dangerous for America’s allies as it is painful for Iran.
That is why Rezaei’s warning matters. Economic wars sound tidier than military ones. There are no televised explosions when a bank account is frozen, an oil shipment blocked or a ship removed from a registry.
But sanctions require enforcement. Blockades require warships. Tankers need protection. Countries forced to choose sides begin searching for leverage of their own. Then a campaign designed to avoid another shooting war starts assembling all the machinery required for one. Trump calls it Economic D-Day. Iran calls it an act of war. The Strait of Hormuz lies between them, carrying whatever oil can still get through and waiting to see which side blinks first.