WSJ: Iran’s economy under pressure amid US's tightening naval blockade

Iran is facing mounting economic and political pressure as a U.S. naval blockade continues to disrupt the country’s oil exports and trade routes, with divisions emerging inside Tehran over how to respond, The Wall Street Journal reported.

Tehran initially believed it was gaining leverage after the conflict began in February by targeting vessels transiting the Strait of Hormuz. The attacks halted commercial shipping through the strategic waterway, disrupting roughly one-fifth of global oil and liquefied natural gas supplies. However, six weeks into the conflict, the United States escalated its response by imposing a blockade on shipments departing from Iranian ports.

The blockade has effectively shut down Iran’s “shadow fleet” — vessels that had long circumvented U.S. sanctions by turning off tracking systems and secretly transferring oil cargoes at sea, largely for shipments destined for China. The report said U.S. warships have pursued these vessels as far as the Indian Ocean, preventing them from breaking through the blockade.

“There is no evidence any Iranian oil cargo has crossed the U.S. blockade and reached Chinese customers or other buyers,” The Wall Street Journal cited commodities data company Kpler as saying.

U.S. Central Command said on April 30 that 44 commercial vessels operating for Iran had been ordered to turn back or return to port.

Alternative routes are unlikely to offset the impact of the blockade, the newspaper reported.

“Only 40% of Iran’s trade can be redirected away from blockaded ports,” the Iranian Shipping Association said on April 30 through the Fars news agency, which is affiliated with Iran’s security services.

The worsening economic strain has exposed deep divisions within Iran’s leadership. Moderates are said to favour restraint and negotiations with U.S. President Donald Trump, believing he wants to exit the conflict quickly. They are also concerned that public support for the war is fading after an initial rise in nationalist sentiment.

At the same time, The Wall Street Journal said a growing faction of hardliners is calling for renewed military action, arguing that escalating the conflict could push oil prices higher and increase pressure on Washington. According to the report, these officials see the blockade as going beyond sanctions and view it as “an act of war” requiring a military response.

Iranian officials told The Wall Street Journal that Tehran may deploy previously unused military capabilities to target U.S. naval forces, including submarines and “mine-carrying dolphins.” The Islamic Revolutionary Guard Corps has also warned it could intensify the conflict by targeting undersea communication infrastructure in the Strait of Hormuz.

The Revolutionary Guard-linked Tasnim news agency recently published a map of submarine internet cables crossing the strait, in what was interpreted as a warning that regional telecommunications systems could become targets.

The newspaper also reported that Iran presented regional mediators over the weekend with a proposal to halt attacks in the Strait of Hormuz in exchange for a complete end to the conflict, the lifting of the U.S. naval blockade and a delay in nuclear negotiations.

However, Trump told aides on April 27 to prepare for a prolonged blockade that could remain in place until Iran meets U.S. nuclear demands.

The economic consequences have been severe. More than one million people are reportedly unemployed, food prices have surged, and a prolonged internet shutdown has significantly affected online businesses, increasing the risk of economic collapse in Iran.

By Sabina Mammadli