Crude oil prices rebounded above the key resistance level of $100 on Monday as traders reacted to Donald Trump’s blockade of the Strait of Hormuz following the collapse of U.S.-Iran talks. However, a leading American professor has cautioned that the blockade will not only prove ineffective but could also be counterproductive.
Donald Trump Strait of Hormuz blockade
The US and Iran held a lengthy discussion in Pakistan last weekend to resolve the key issues and move towards peace.
Vice President JD Vance led the US delegation that also included Jared Kushner and Steve Witkoff. Iran’s delegation was led by the Foreign Affairs minister and the Speaker of the parliament.
These talks failed to achieve the goals, with Iran maintaining its desire to continue its control of the Strait of Hormuz. It also rejected Washington’s demand to return its enriched uranium.
Iran also rejected US’s excessive demands, which were not realistic. Officials believe that time is on their side as they maintain a huge stockpile of ballistic missiles and drones, while Israel has moved to ration its interceptors.
In a response to the meeting, President Trump said that the US Navy would blockade the Strait of Hormuz, ensuring that Iran does not make money in tolls. Iran has been taking $1 per barrel of oil, with some large super tankers paying over $2 million.
Trump aims to cut off revenue that goes to the Iranian government, which he hopes will help to pressure officials to reopen the Strait.
This is notable as Iran has been making a lot of money as the war continued. It has been selling over 1.5 million barrels of oil per day, higher than the 1 million before the war started. Also, the country has benefited from the relatively high oil prices and sanctions relief, which made it over $14 billion.
Professor John Mearsheimer warns the blockade will fail
In an interview with Tom Switzer, Professor John Mearsheimer, a top political science professor, warned that the blockade will not work.
First, he noted that the blockade will push oil prices higher, driving US inflation much higher in the near term. Indeed, the West Texas Intermediate (WTI) and Brent crude oil pricesjumped above $100 on Monday.
Analysts believe that the surge may continue, with Goldman Sachs analysts predicting that it will jump to $130 in the near term if the ceasefire ends. Polymarket and Kalshi polls show that prices will keep rising in the near term.
Soaring oil prices will push inflation much higher. A report released on Friday showed that the headline Consumer Price Index (CPI) jumped to 3.3% in March as the core CPI spiked to 2.7%.
At the same time, US consumer confidence plunged to the lowest level in years, a move that is already affecting Trump’s approval rating.
Additionally, the professor argued that Trump’s attempts to force Iran to “cry uncle” would not succeed as the country views Israel and the United States as existential threats. As such, the country will be comfortable to take pain for a long time.
Mearsheimer also believes that Iran and Yemen’s Houthis will start blocking oil flows through the Red Sea, where 12% of all oil passes. Even if it does, Iran will intensify its attacks on Saudi Arabia’s oil infrastructure, a move that will lead to higher prices in the near term.
He believes that these actions will push the US to concede to the Iranians.
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