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The ceasefire between the US and Iran is set to expire next week, and following an inconclusive round of peace talks in Pakistan, the US is trying a different tactic to pressure Iran into a deal, a naval blockade.
President Trump says the US blockade in the Strait of Hormuz has begun.
Two tankers under US sanctions turning round as the restrictions went into effect. President Trump announcing that any Iranian who fires at US or at peaceful vessels will be blown to hew.
The blockade was implemented Monday, further cutting off the Persian Gulf from the rest of the world.
It seems as though President Trump has been saying, you know, the street must be opened, the straight must be opened, the street must be opened, 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 I 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 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 US feels quite strongly about.
People familiar with the matter told Bloomberg that the US and 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.
I'm Sarah Holder, and this is the big tack from Bloomberg News today on the show, how the US is an evil blockade of the Strait of Hormuz works, what could happen if it's tested, and how this latest pressure tactic could influence another route of Iran US peace talks. But my first question for you is just what is the status of the US 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 US 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, that would be into the Arabian Sea, and that starts to get you closer towards the coastline of various Gulf countries.
I've seen reporting that the US is deploying as many as fifteen ships to create this blockade. What is their role here?
So?
I think a lot of folks think of a blockade as accordon that you're going to have, you know, 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 US is likely doing with various intelligence, surveillance and reconnaissance assets, potentially even space based assets, as well as potentially even communication with those ships, and whenever there's any vessel that the US 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, you 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 i Ron pause on any type of potential retaliation. However, I think it's notable where the US 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 Horror Moon. That doesn't negate any all of the threats. You know, some of the US 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. And 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 US might enforce this blockade. What do we know about enforcement here?
I think some of the bigger unknowns right now are really whether the US is going to take the narrow interpretation of a blockade that US 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 I wrong. If that is the case, then you're likely to see a lot more US operations outside of the Middle East.
That's when you could see the US 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 Straight of hor Moos, the Trump administration is essentially closing traffic near the Straight of hor Moos. Can 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 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 US feels quite strongly about.
But in order to create that pressure, the US 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 you know, threatening to close the straight and essentially you know, freezing all traffic.
So how could the blockade affect negotiations between Iran and the US, and what is Israel's role that's after the break. The closure of the Straight of Hormuz has snarled global oil supplies and become a key flash point in negotiation between the US and Iran. To understand how the US'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 Horn moves now the US 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 US, or 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 US had, crudely speaking, were to strike a deal or to go back to war, and this Nyan 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 straight ofform News 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. So the US, in doing this latest move, is trying to cut off at least a 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 able to, you know, send some limited volumes over land, They might be able to draw on ports that are less exposed to the straight as such. So 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, and for the.
US for sure, right, we have to assume that, well, no doubt ground options were among those presented to the President in Washington. It obviously comes with huge risks, kinds of risk that what's largely been an air campaign so far don't have. Right from the US defense planner's perspective, this was quote unquote the beauty of the campaigns so far that from a relative distance and with relatively few from their perspective, casualties, they were able to cause wide
spread destruction to the enemy. That 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 blockhead, right, because then you may end up in territory where you're looking at conflict on the water. We've had the Venezuela president a few months back where we had ships delivered trying to evade that blockade and
the US having to chase after them. So there's both kind of reputational risks and obviously more 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?
I mean, with the time skills that we're operating in right this ceasefire is supposed to end early next week, so we have to assume that the side 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 been the currency has been in free fall, inflation over thirty percent, and 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 in calculation that the US doesn't want this to drag on, and US consumers, US buyers of gasoline don't want this to continue.
A lot of what comes next to here depends on how quickly and how well peace talks go between Iran and the US. 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.
I 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 America and Iranian
officials in a very very long time. Right. These are obviously two countries that have been sworn enemies largely since the nineteen seventy nine 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 making in the defense establishment, to be there on the other side of the table the
American Vice President. That in itself was remarkable, and I suppose We can only hope that with that contact, contact at such a high level, the two sides got something of a sense of each other.
I 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 hawks this week in DC. 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 that it limited some of its strikes on Lebanon that the Iranians said that they're happy to go ahea head, enter the
actual room and start talking with the Americans. They were very keen to make that a condition of their participation.
Now it's worth stressing. I think the US pushed back on that 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 allied militias that it has like Kesbolla in Lebanon, like the Huthis in Yemen, because from Iran's perspective, Iran's 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 the terrence so that there's some sembilance of balance again in the region. At the same time, it's using whatever leverage it's been able to build up in this hot war the US in Israel to kind of display i think, a sense of solidarity with those regional militias like Kesbula 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 diffidend.
This is The Big Take from Bloomberg News. I'm Sarah Holder. To get more from The Big Take and unlimited access to all of Bloomberg dot Com, subscribe today at Bloomberg dot com slash Podcast offer. If you like this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts, it helps people find the show. Thanks for listening. We'll be back tomorrow.