Shortly after implementing a naval blockade in mid-April, U.S. President Donald Trump suggested that Iran’s oil pipelines would face disruptions within a few days due to their inability to export crude oil. Although Trump’s prediction did not materialize as expected, there are indications that the blockade is beginning to impact Iran’s economy.
With maritime traffic in and out of Iranian ports effectively halted, the country’s oil production has decreased, its currency has hit record lows against the U.S. dollar, and reports of significant job layoffs have emerged.
During a White House event this week, Trump remarked, “They can’t pay their soldiers. The money is worthless.”
The primary concern now is whether the economic repercussions will be sufficient to compel the Iranian government to comply with the Trump administration’s conditions for a peace agreement, which include ending nuclear enrichment activities and relinquishing control of the Strait of Hormuz.
Edward Fishman, the director of the Center for Geoeconomics at the Council on Foreign Relations in New York, highlighted the effectiveness of the blockade, emphasizing that the Iranian government heavily relies on revenue from oil exports.
“Without this revenue, the Iranian government is facing significant challenges in paying employees and obtaining imports from other countries,” Fishman explained to CBC News.
Fishman added, “This blockade is severely impacting Iran’s economy and imposing substantial economic pressure on the government and the nation as a whole.”
When Will the Economic Impact Peak?
Although analysts generally agree that the blockade will harm Iran’s economy, there are differing opinions on when the impact will be most severe. The timing depends on factors such as the amount of crude oil already exported before the blockade commenced and Iran’s storage capacity for excess oil production.
According to reports, Iran has stored around 140 million barrels of oil on floating tankers outside the blockade zone, primarily destined for China. This supply could sustain Tehran’s oil revenue levels until at least August, as indicated by a report from the Soufan Center, a research organization based in New York.
President Donald Trump announced the United States would apply its own blockade of the Strait of Hormuz in retaliation for Iran’s de facto shutdown, which is now stretching into its seventh week. But, as Andrew Chang explains, responding this way to Iran’s control of 20 per cent of the world’s energy supply could pose several risks as the war in the Middle East escalates.
CORRECTION (April 16, 2026): An earlier version of this video incorrectly used an aerial image