The strait of silence: How US naval blockade and sanctions are choking Iran to death

US-Iran Tensions: Months of military confrontation with the United States and Israel have hit Iran’s economy hard. Sanctions, disruption to sea transport and falling imports and exports have cut into the country’s foreign-currency earnings. The biggest impact is coming from restrictions on shipping routes in the Persian Gulf and the Strait of Hormuz. Iran depends on its southern ports for both imports and exports. Any disruption in those waters creates a direct problem for trade. Iranian Customs chief Foroud Asgari said the country’s non-oil exports stood at around $15 billion between the beginning of 2026 and August 15, down 28.2 per cent from the same period last year. Imports fell 26.1 per cent to around $17 billion. That left the country with a non-oil trade deficit of roughly $2 billion during the period, its weakest level in the past decade. President Masoud Pezeshkian has also described the impact of sanctions, saying imports and exports have fallen by between 25 and 35 per cent. The dip in imports has a direct effect on daily life because Iran depends on foreign supplies for basic goods, raw materials, machinery, medicines, fuel and food. Disruptions in these supplies can lead to shortages and make everyday goods more expensive. Oil exports have also changed considerably as restrictions on shipping have tightened. During periods when maritime restrictions eased, Iran’s exports were estimated at around 1.7 million to 2 million barrels per day. Oil loading fell in August 2026 after restrictions were re-imposed. Iran's oil exports have fallen compared to a few months ago to 255,000 barrels per day, while in recent months it has reached around 2 million barrels per day. The fall is attributed to the US naval blockade, sanctions and tensions in the Persian Gulf. Iran relies heavily on its southern ports for foreign trade. The disruption has also affected the supply of foreign currency, supply chains and inflation. The decline in government revenue from oil exports and the inability to import essential goods for people have disrupted the economy and people's lives, and ultimately increased inflation. A Kepler report dated September 25, 2021, said crude oil exports from the Persian Gulf region had fallen by around 47 per cent from pre-war levels, from roughly 17 million barrels per day to around 9 million barrels in 2025. Shipping traffic through the Strait of Hormuz also faced tight restrictions. Iran’s main oil export terminal has suffered an even bigger disruption. The Financial Times reported that no tanker has visited Kharg Island since August 2026. The island is the source of around 90 per cent of Iran’s oil exports. Windward Marine Intelligence, which analyses satellite imagery, said all three ports on the island has been "empty for a long time". Richard Burns, head of geopolitics at the Energy Aspects think tank, said the naval blockade has affected Iran’s operations. Iran has also cut oil production to deal with the situation. Hamid Hosseini, spokesman for the Iranian Oil, Gas and Petrochemical Exporters Association, said, "We have enough experience to shut down oil wells without permanent damage and restart them when needed." He said that experience has come from years of sanctions and production shutdowns. Long periods of reduced production can create problems for oil fields and equipment. Columbia University’s Center on Global Energy Policy warned in April that keeping wells and oil fields shut for a long period could damage facilities and permanently reduce Iran’s production capacity even after a blockade is lifted. Iran’s floating oil stocks are also falling. Its reserves in Asian waters have fallen from 100 million barrels to around 30 million barrels, and around 1 million barrels a day are being withdrawn from these reserves. The reserves could run out soon if the trend continues. Gas production has also suffered. An official statement from Iran’s Oil Ministry said attacks have affected the country’s gas production and processing capacity by around 230 million cubic metres per day. The US Energy Information Administration says around 28 per cent of Iran’s gas consumption is used for power generation and large industrial sectors, while one-third is used by households and the commercial sector. Disruption to gas supplies therefore affects electricity generation, industries and household gas availability. Iran’s ports are among the first parts of the economy to feel the effects of military tensions and restrictions on maritime trade. Rajai Port, the country’s largest commercial port, handles around 55 per cent of the country’s non-oil trade and 70 per cent of its container trade. Its activity has fallen after restrictions in the Strait of Hormuz tightened and shipping traffic declined. Surveys show that activity at Rajai Port has been very low in recent weeks, with large-scale job losses and thousands of permanent port workers left without work. Merchant shipping has also faced restrictions. According to US Central Command (CENTCOM), the US Navy has diverted or forced back 55 merchant ships heading towards Iran by the beginning of August 2015. Iran has other ports, including Khomeini, Bushehr, Chabahar, Amirabad and Anzali. Their capacities vary, and they cannot fully absorb the trade lost through the southern ports. The northern ports have taken on a larger role in imports of basic goods and livestock, though their capacity is far smaller than that of the major southern ports. Jafar Qadri, a member of Iran’s Parliament Economic Commission, said 83 per cent of the country’s total imports, amounting to 210 million tonnes, enter through the southern maritime border. “When we are under a naval blockade, we face difficulties. How much capacity do we have in the eastern, western and northern corridors?" he said. Land routes also cannot fully replace maritime trade and come at a much higher cost. Majid Reza Hariri, head of the Iran-China Chamber of Commerce, said at the beginning of September that transporting goods from China to Iran by land costs the Iranian economy around $18 billion. He said the cost of transporting a container through the sea and southern ports is around $3,000, while the land route costs about $12,000. Around 2 million containers enter Iran through the southern route every year. Food, medicine and fuel supplies are facing difficulties. The disruption to foreign trade is reaching supply chains for essential goods and eventually Iranian households. Iran depends on imports for medicines, wheat, animal and poultry feed, cooking oil and several other basic requirements. Financial restrictions, problems with maritime transport and difficulties in transferring money have increased the cost and risk of these imports. The pharmaceutical sector has its own problems. Hadi Ahmadi, spokesman for the Iranian Pharmacists Association, said, "The situation in the pharmaceutical sector this year is not like previous years because not only is the raw material needed for domestic production not available in sufficient quantities, but medicines are also not being imported properly." Fuel supplies are another immediate problem, with petrol shortages becoming a major challenge. The deputy head of Iran’s Energy Optimisation and Strategic Management Organisation said two weeks ago, "If we had been talking about the petrol issue six months or a year ago, we would have been facing basic and long-term problems, but today and at this moment, we are facing a serious issue that needs an immediate solution." Data from the National Iranian Oil Products Distribution Company show daily petrol consumption has reached between 135 million and 154 million litres in recent months, while production stands at around 112 million litres. Pezeshkian has said the government does not have the capacity to import petrol and sell it at previous prices. Importing petrol from Iraq through land borders is not enough to meet Iran’s daily needs. Wheat is another major issue. Customs data showed that Iran imported around 2.75 million tonnes of wheat worth about $1 billion during the 10 months to February last year. The Food and Agriculture Organisation has warned that the depreciation of Iran’s currency, logistical problems and difficulties importing essential goods have pushed up food prices. The report said the price of wheat flour in Tehran rose by around 120 per cent in one month at the beginning of 2026 and by almost 200 per cent compared with the previous year. Iran is also heavily dependent on imports for animal and poultry feed. The country imports an average of around 8 million tonnes of maize and 2.4 million tonnes of soybeans each year, with around 95 per cent of its feed maize coming from Brazil and Ukraine. Disruptions to international transport or payments can eventually affect poultry, egg, dairy and meat production. The cooking oil market faces a similar supply risk. More than 80 per cent of Iran’s requirements for crude oil and oilseeds such as soybeans, sunflower and palm products come from abroad. Most of these imports come through southern ports. Any disruption to sea routes can therefore affect both the supply and price of cooking oil. Iran still has several land and sea routes through which it can keep some foreign trade moving. The network has helped prevent major shortages in the domestic market. These routes have lower capacity and higher costs than the main maritime route. One option is the China land and rail corridor. Mehr News Agency reported that a train carrying goods from China to Iran transports around 1 million tonnes of goods a day. Higher transport costs and limited capacity make it difficult to expand the route on a large scale, though it can meet some import needs when maritime trade is disrupted. Routes through Russia, Central Asia and the Caspian Sea are becoming more important in northern Iran. They are mainly used for grain, livestock, industrial raw materials and metals. Amir Hossein Afreshtipur, vice chairman of the board of directors of the Iranian Grain Association, told local media that northern routes previously accounted for around 5 to 10 per cent of Iran’s imports. Their share has now increased to between 25 and 30 per cent. The government has also sought to use North Sea transport capacity to maintain food security. The deputy agriculture minister said that under a "storage at sea" strategy, some ships being used as floating warehouses for strategic goods had been unloaded ahead of schedule to keep essential supplies moving. Iran’s land borders with Iraq, Turkey, Pakistan, Azerbaijan, Turkmenistan, Armenia and Afghanistan are also active. Turkey is one of the most important land routes for Iranian trade. Iran imports around $10 billion worth of goods each year through countries connected by land borders, with Turkey accounting for around $8 billion. These routes have not been completely shut, although financial restrictions, curbs on trade and transport problems have reduced and slowed the flow of goods. The condition of Iran’s economy can be seen through three main indicators: foreign trade volumes, the exchange rate and inflation. Shipping restrictions, new sanctions and difficulties in transferring and settling payments have increased the cost of moving goods into the country. As imports become difficult, transport, insurance and financing costs rise. Demand for foreign currency also increases. A weaker rial makes imported goods more expensive, including products that continue to enter Iran through northern ports, land borders and other routes. The main problem is the rising cost and difficulty of getting goods into the country. If the disruption lasts for a long period, its impact can spread from importers and ports to producers, distributors and households. 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