when America and Israel launched their war on Iran back in February, most observers expected Iran would choke off shipping in the Strait of Hormuz. I think very few people expected that less than two months later, Donald Trump would essentially do the same thing himself. I think Trump hopes that economic strangulation of Iran is going to work where bombardment has failed.

It's a gamble, and I think a dangerous one that could compound the global energy crisis and lead to another fresh round of escalation in this war. So explain the fuller rationale here. I think the rationale here is quite simple, Rosie. It's America saying, look, if Iran's not allowing other people's ships to pass by threat of missile attack or drone attack or mines, then Iran's shipping will not be allowed to pass either. That's quite straightforward in military terms. America can board and seize ships very easily.

It did. You might recall ten tankers, linked to Venezuela, I think in the last sort of six months, six months or so. It's the economic and political aspects of trickier. The aim is probably to sever Iran's economic lifeline and make the regime, plunge into some sort of economic crisis, and then it will have to make a deal with America over what proved to be the sticking points in these talks we just had in Islamabad over its nuclear program. And 1 or 2 other things.

I think in practice it's going to be a lot harder than that. Just explain to me how America is actually enacting this blockade, and whether you think it will achieve those aims you've outlined. the mechanism is that America's central command, which is the branch of the Pentagon that runs operations in the Middle East, has said it will basically impose a blockade on all ships that originate in Iranian ports or go through Iranian coastal waters. And it will do that impartially, that is Iranian ships, Chinese ships, whatever.

It doesn't matter. And that's a requirement of blockade under international law that they're enforced in that impartial way. And what they're trying to do, essentially is say, if a country is trying to use Iran's so-called tollbooth system that is getting permission from the Revolutionary Guards paying a fee to Iran, these ships are typically going through Iran's coastal waters very close to Iran's coastline. And this is a way of saying, if you do that, we will come and get you at the other end. Now, I think that's going to be enforced, in the Gulf of Oman, rather than going all the way up into Hormuz at that choke point, you know,

why would you be trying to board ships in such a dangerous area? And I think we're going to have a test of this very soon, because there has been a, a Chinese tanker. In fact, I think it's a falsely flagged tanker It's already heading out through Hormuz overnight. You know, this morning, as long as I'm talking to you, Rosie. So we'll find out exactly what happens. But I think the point is that if you do enough of this, Iran's oil exports will eventually be disrupted. The problem is that Iran's just not exporting all that much oil at the moment. And if you think back to 2020, Iran's oil exports dipped well below,

I think it was 400,000 barrels per day. That was when Trump tried to crush Iran's economy. And Iran survived that. And so my concern is Iran can endure months of this pressure. You know, it can print money. It can sell something like 100 million barrels of oil that have some floating storage of Malaysia or China, and it can get credit lines, of some of it, some of its, buyers. So all in all, my concern is this will take far longer to essentially bring Iran to its knees than I think Donald Trump can stomach. So you think Iran can endure this? But what impact will it have on energy markets?

Well, that's exactly why I think it's going to be difficult for Donald Trump to endure this, because the loss of Iranian output is not in itself catastrophic. The big, big problem is that I think Iran is going to respond to this by, attacking or restricting neutral shipping as well to say, well, if you blockade our ships, we'll go back to blockading all of yours. And what that will do is it will, really trap this massive volume of Gulf supply, which has been trapped for months. And Iran's not going to allow that to come out. That's a big problem, right?

Because importers will have to then draw down stocks that are already very limited. I think that will probably push Brant crude futures to $150 a barrel by the end of April. And if you factor in potential Iranian strikes on energy facilities, as we saw in previous weeks, then, and also the prospect that the Houthis in Yemen join this, join this war as well, which they were very cagey about. I think you're going to see a serious tightening of oil markets again, just as the traders were sort of breathing a sigh of relief and saying, oh, maybe it's back to normal now.

And presumably this will affect other types of ships and shipping as well. Absolutely. As I said, a Chinese tanker is already trying to get out of Hormuz. What's going to happen, you know, is America going to seize a Chinese tanker? And it's not just China. It's it's oil that's been bound for China, Pakistan, Thailand, all of it moved out of Hormuz in the days after the cease fire.

I think I've certainly seen French and Turkish ships send their, the vessels through Hormuz prior to that point and seemingly with Iranian consent. So whilst the, the you know, for example, the Indian say we haven't paid Iran a toll to get through, we haven't paid Iran a fee. And that's what Donald Trump said was his real concern. But if you look at the rules of this blockade set out by the Pentagon, they say any ship going through Iranian coastal waters, coastal areas or port is going to be subject to, this blockade impartially. And that would probably cover these a lot of these ships.

So you have the prospect of America imposing a blockade that will affect not just adversaries like China, but many of its allies, partners and friends like Pakistan, like Thailand, like the French, like the Turks. And I think that's going to be diplomatically very difficult for the US to handle, because it will be compounding this energy crisis, blockading friendly shipping. And of course, probably triggering another round of escalation. you said at the top that it was a dangerous gamble. Could it pay off? Well, look, if this really succeeds in choking off Iran's hard currency, access, if it generates an economic crisis in Iran, and hyperinflation as the currency devalues

and the government prints money, all while curbing the impact on oil prices, curbing the impact on commodities. You know, we've discussed, Rosie, is not just oil going through the Hormuz. If it can limit military escalation, then yes, perhaps it brings Iran to its knees, back to the negotiating table. And the regime says, okay, we're willing to negotiate on, 400kg of highly enriched uranium on the future of enrichment. And there are some reports Iran was discussing, you know, a sort of 20 year moratorium on enrichment,

which would be quite a big deal if they had agreed to something like that. I am doubtful. I think Iran, as you know, Rosie, feels like it won that first round of hostilities. Not that it didn't come out very badly, but that it survived. It controlled Hormuz. It had its nuclear stockpiles in its hands at the end of this conflict. And I think it will look at the situation here and say, Donald Trump have midterm elections in, what is it, seven months? The oil prices rising, petrol prices are rising.

Gas prices are rising. In that situation, who can hold out longer? The theocratic regime that has survived against, you know, a siege since 1979 Or an American government who is led by a man who's well known for, how should we say it, backing away from the precipice from some of these confrontations? And who has this major electoral contest coming up over the horizon, where voters are already unhappy with his performance on the war and with inflation in those circumstances, I reckon Iran thinks it can outlast an American blockade.

Shashank, thank you very much for talking to me. Thanks very much, Rosie.