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economicMay 6, 2026

Iran’s New Oil Weapon

Summary

Despite a fragile cease-fire between the United States and Iran, the global economic crisis sparked by the closure of the Strait of Hormuz continues unabated. Dueling blockades have kept 20 percent of the global oil supply, 20 percent of the global supply of liquefied natural gas, and critical commodities such as helium, aluminum, and urea trapped inside the Persian Gulf, unable to reach markets. U.S. efforts to evacuate ships from the strait have been met with a renewed barrage of Iranian missiles and drones, and very few ships have managed to get through. The economic impacts of this crisis have already begun to crystallize: shortages of fuels and other products in East Asia and Australia, skyrocketing jet fuel prices, and a drop in the global demand for oil for the first time since the COVID-19 pandemic in 2020. In the United States, gasoline has exceeded $4 a gallon and could break $5 by the end of May. Should the strait remain closed, these economic pressures will worsen, causing rising inflation and slowing GDP growth. Iran’s ability to close the strait has been likened by political analysts to the “oil weapon” used by Arab oil producers against the West in the early 1970s. But in truth, the international system now faces a larger and more durable challenge than it did then. Even if Iran fails to institutionalize its control over the strait by establishing some kind of long-term toll system, it has proved that it can close the waterway to traffic even in the face of significant military force. This threat will hang over the global economy for the foreseeable future. It seems unlikely that the U.S. and Israeli military campaign will topple the Iranian regime; whatever eventual deal ends this round of conflict will almost certainly leave Supreme Leader Ayatollah Mojtaba Khamenei and his allies in the Islamic Revolutionary Guard Corps in place. If and when hostilities flare up again, Tehran will be able to lock down the strait. Washington should acknowledge and address this risk and not fall under the illusion that military force and diplomatic maneuvering can permanently solve this problem. The United States will need to open the strait in the next few months to avoid an even more serious economic crisis. This will likely require a combination of negotiations and pressure from the U.S. blockade. But over the long term, the United States needs to find ways to make sure that if Iran tries to close the strait again the global economy will not suffer as it is suffering now. Washington should embrace strategies that build energy resilience and reduce exposure to future strait closures. It should also support efforts to expand shipping routes in Persian Gulf states and revive supply-side incentives to accelerate the energy transition both at home and abroad. Only by reducing its dependence can the United States undercut the strategic significance of the strait and rob Iran of its leverage. FOOL ME ONCE The clearest parallel to Iran’s weaponization of the Strait of Hormuz is the 1973 Arab oil embargo, when the Arab members of OPEC cut oil production and banned oil shipments to the United States following the outbreak of war with Israel in October of that year. The embargo had a profound impact—causing severe gasoline shortages in the United States and contributing to a 400 percent increase in the price of crude oil globally—but its use as a policy tool proved to be short-lived. The oil embargo succeeded because the stars aligned in its favor. U.S. dependence on foreign oil had increased sharply between 1967 and 1973, and domestic production began to decline in 1970. This gave Arab producers unique leverage, which they did their utmost to weaponize. That leverage quickly receded, however. Non-Arab members of OPEC, led by the Iranian shah, Mohammad Reza Pahlavi, continued producing oil, undermining efforts to squeeze the market through production cuts. The oil embargo was lifted in March 1974, after weeks of negotiations between U.S. Secretary of State Henry Kissinger and Arab leaders. By 1975, real oil prices had fallen again, in part because of inflation. (A second shock from 1979 to 1980 caused prices to double yet again, but the cause was the sudden collapse of Iran’s oil production amid the Islamic Revolution rather than concerted action by producers.) Having done it once, Iran can shut down the strait in the future. In the wake of the oil crisis, the United States and other industrialized economies developed tools for handling future shocks, the most important of which was a system of petroleum reserves that could act as a cushion against disruptions. No country or group of countries was ever able to successfully deploy the oil weapon again because OPEC and its Arab members were never again in a position to hold the global economy hostage. By contrast, Iran’s success in the Strait of Hormuz is likely to prove more durable. The Islamic Republic has spent decades developing the capabilities needed to close the strait: mines, rockets, drones, antiship ballistic missiles, and a fleet of small, fast boats that can swarm and overwhelm passing ships. And it has succeeded in doing so with relatively little effort. Since February 28, Tehran has carried out more than 20 attacks on ships in waters surrounding the strait, according to the Joint Maritime Information Center, which monitors maritime traffic in the strait; coupled with depositing land mines in the strait and attacking onshore targets in Gulf states, this was enough to grind traffic to a halt. A month of heavy bombing by both the United States and Israel was not enough to force the strait open; naval escorts have proved challenging to arrange, given the reluctance of other countries to enter the conflict; and shippers remain unwilling to transit the strait owing to the high degree of uncertainty surrounding the cease-fire deal. Having demonstrated it once, Iran can now credibly threaten to shut down the Strait of Hormuz in the future. Its military capabilities have been degraded but not destroyed. It would take little effort for Iran to deter shippers from resuming traffic. All it would have to do is lay a few more mines or launch small-scale attacks on passing ships. And should Iran successfully establish a tolling system and force every ship to pay a fee to pass through the strait or suffer possible attack, it is unlikely that military force could dislodge it from that position. Regional states, shipping companies, and international actors must now regard Iran’s threat as real, even if the strait is eventually reopened in the short term. ON THE STRAIT AND NARROW In the coming months, the United States will need to use a combination of force and diplomacy to reopen the strait. Iran has begun levying tolls on passing ships, but it is likely to encounter problems maintaining this system given broad opposition from regional states and shipping companies. Washington has opted for economic pressure via a naval blockade that is strangling Iran’s ability to export oil, while “Project Freedom” aims to free ships trapped in the strait using U.S. naval deployments. At the same time, negotiations between the two sides, however slow, have not completely collapsed. Although it may take weeks, or perhaps months, reopening the strait is a necessary component of any durable cease-fire agreement—provided, of course, the United States and Iran do not resume hostilities. Over the next several years, however, Washington and its international partners must pursue further strategies to limit their vulnerability to any future closure. One such strategy would be expanding energy networks in the Persian Gulf. Saudi Arabia and the United Arab Emirates already have pipelines that avoid the strait by moving oil to the Red Sea and the Gulf of Oman, respectively, and that can carry approximately nine million barrels a day—nearly half the total volume that typically moves through the strait. Additional lines will be needed to ease the burden on Bahrain, Iraq, and Kuwait, which currently lack ways to bypass the strait. Bahrain and Kuwait could plausibly build lines that connect to the Saudi network. Iraq is in a tougher position because its only viable routes for new pipelines are west to the Mediterranean, an unattractive option for an oil exporter that ships most of its oil east to Asia. For the transit of goods other than oil, expanded road and rail networks running parallel to the Gulf into Oman or to the UAE port at Fujairah would provide relief in the event that the strait is blocked to container or cargo traffic. The United States could assist with the financing of such projects and could deploy credits or loans via the Export-Import Bank or the International Development Finance Corporation, justifying the action on national security grounds: money spent on building infrastructure that avoids the Strait of Hormuz would strengthen the position of the United States and its allies against Iran in the event of future confrontations. Washington could plausibly pull other international actors, such as European states, India, Japan, Pakistan, and even China, into such projects, given their collective interest in maintaining access to Persian Gulf energy. Such actions would also provide the United States with a means of leading the international response to the Hormuz crisis and strengthen U.S. ties with its Gulf partners. Money spent on infrastructure that avoids the strait would strengthen the U.S. position. At home, the United States should do more to strengthen resilience against energy shocks. Already the world’s biggest oil and gas producer, the United States could invest in greater domestic storage, including a strategic reserve of refined products such as diesel and gasoline. It should also move to aggressively refill and expand its crude oil reserve, which had been depleted by two record draws in 2022 and 2026, following Russia’s invasion of Ukraine and the start of the war in Iran. The United States’ refinery complex is heavily concentrated in states along its Gulf Coast, which leaves the west and east coasts vulnerable to disruptions in overseas supply. California, for instance, depends on Middle Eastern oil for one-fifth of its overall consumption. Building new pipelines at home would stiffen resilience, just as constructing new pipelines in the Persian Gulf would. Washington should also permanently suspend the Jones Act, a century-old statute that makes it hard to transport domestic energy from one U.S. port to another. But the best way to address the United States’ vulnerability to hydrocarbon price shocks would be to reduce exposure to hydrocarbons. The Trump administration should consider reviving Biden-era incentives for clean energy and electric vehicles, easing restrictions on the installation of renewable energy systems, and pursuing an all-of-the-above, supply-side energy policy that supports the development of both renewables and fossil fuels, so as to make energy cheap, available, and abundant even in a time of heightened risk and disruption. As with the 1970s crisis, the shock produced by the war with Iran and the closure of the Strait of Hormuz is likely to have extensive ripple effects, no matter how or when the conflict ends. Unlike the earlier crisis, however, the threat posed by Iran’s new “oil weapon” is likely to prove far more durable. Iran has demonstrated that it can close the strait and keep it closed, even in the face of the full force of a global superpower. There is no returning to the status quo ante, when shipping through the strait was assumed to be risk free under the watchful eye of the U.S. Navy. The United States and other countries, both in the region and elsewhere, will need to build out the global energy system so that the next time Iran tries to take the world hostage, the world will not be so easily trapped. You are reading a free article Subscribe to Foreign Affairs to get unlimited access. - Paywall-free reading of new articles and over a century of archives - Six issues a year in print and online, plus audio articles - Unlock access to the Foreign Affairs app for reading on the go Already a subscriber? Sign In

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  • Gregory BrewBy Gregory Brew

    Despite a fragile cease-fire between the United States and Iran, the global economic crisis sparked by the closure of the Strait of Hormuz continues unabated. Dueling blockades have kept 20 percent of the global oil supply, 20 percent of the global supply of liquefied natural gas…

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Binance Gave Russia Data, User Arrested Over Ukraine Donations

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Binance provided Russian authorities with personal and transaction data on a Russian IT specialist whose cryptocurrency donations to Ukrainian fundraising campaigns were later used as evidence in a “terrorism” financing case, Reuters reported on Monday.

The documents reviewed by Reuters show that Russian investigators requested the information from Binance and received details identifying the user and his cryptocurrency transfers to Ukrainian organizations. JOIN US ON TELEGRAM Follow our coverage of the war on the @Kyivpost_official.

The case raises questions about Binance’s handling of Russian law enforcement requests after the company said in 2023 that it had fully exited the Russian market. Binance data used in Russian criminal case Russian investigators alleged in October 2025 that IT specialist Yuri Belenkiy, a 49-year-old Russian citizen with a Bulgarian residency permit, had sent more than $700 in cryptocurrency to the Ukrainian military and an associated organization.

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The data was incorporated into the case against Belenkiy. An interim case summary sent to Russia’s Prosecutor General’s Office cited the cryptocurrency transfers as grounds for the so-called “terrorism” financing charges. Ukraine Says Russian Explosives Plant Hit, Two Workshops Destroyed The information reportedly included Belenkiy’s date of birth, address, telephone number, passport number, a copy of his Russian passport, and a copy of his Bulgarian residency permit.

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Russia has targeted crypto donations to Ukraine Russian authorities have prosecuted a number of people who donated cryptocurrency to Ukrainian causes, according to rights activists tracking such cases. The documents reviewed by Reuters indicate that investigators also asked Binance to identify other people who had transferred cryptocurrency to a wallet used to solicit donations for Ukraine.

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JetBlue 'Worthless'? Analyst Cuts Rating As Us-Iran Conflict Keeps Fuel Volatile - JetBlue Airways (NASDA

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Another key assumption was that the US-Iran war would end “relatively soon,” he added. However, military experts indicate that the Strait of Hormuz is “unlikely to open anytime soon,” McKenzie pointed out. President Donald Trump signed an agreement in June that set a 60-day deadline for ending the war with Iran and resolving issues on its nuclear program.

The deadline was Monday, according to the Associated Press. Both sides remain at odds. Higher Geopolitical Risk = Lower Valuation Multiple Investors could get a lower entry point into the JetBlue stock, he noted. While jet fuel volatility is a challenge for all industry participants, it poses “a disproportionate risk” to JetBlue Airways, given its “elevated debt levels,” the analyst wrote.

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JBLU Price Action: Shares of JetBlue Airways had declined by 5.75% to $5.33 at the time of publication on Monday. Image: Shutterstock © 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. To add Benzinga News as your preferred source on Google, click here.

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economicUnverifiedIsraelChinaTaiwan

Taiwan and Japan’s colonial past: The history behind today’s political clash | The Jerusalem Post

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World War II brought unprecedented catastrophe and historical trauma to all humanity. The Chinese mainland and the Taiwan region, as the main Eastern battlefield of the World Anti-Fascist War, waged arduous and heroic struggles and made enormous national sacrifices.

Yet in May this year, President Lai Ching-te, the leader of the Taiwan authorities, brazenly attended a so-called memorial ceremony for Japanese engineer Yoichi Hatta, lauding Hatta’s supposed “contribution to advancing Taiwan’s modernization” during Japan’s colonial rule of Taiwan, and even knelt before a memorial statue of his, sparking an uproar both on the island and beyond.

In fact, Japan imposed colonial rule over Taiwan for half a century after launching its war of aggression against China at the end of the 19th century. During this period, military conquest, political repression, economic plunder, and cultural oppression were intertwined, and its numerous crimes brought profound suffering to the people of Taiwan, constituting the darkest chapter in Taiwan’s history.

Economically, Japanese colonialists, such as Yoichi Hatta, enforced the so-called colonial economic policy of “agricultural Taiwan, industrial Japan,” wantonly plundered Taiwan’s resources. Politically, they exercised high-pressure control through the autocratic rule of the governor-general, the Japanese police, and the Baojia system (a community-based surveillance and mutual responsibility mechanism), depriving the people of Taiwan of their various rights and interests.

Culturally, they systematically imposed enslaving education on the people of Taiwan in an attempt to sever the cultural ties between the two sides of the Taiwan Strait rooted in Chinese civilization. After 1937, the Japanese colonialists further tied Taiwan to the war machine of militarism, forcibly recruiting soldiers and laborers and even conscripting “comfort women” in Taiwan.

The people of Taiwan fought one after another against Japanese aggression and colonial rule, with hundreds of thousands of Chinese compatriots paying for it with their blood and lives. For the sake of partisan and personal interests, the Lai Ching-te authorities have disregarded historical facts and gone to great lengths to whitewash and glorify Japanese colonial rule.

This is undoubtedly a distortion of history, a desecration of the martyrs, and a betrayal of the nation. It once again exposes their nature of currying favor with Japan, selling out Taiwan, and resorting to every means in pursuit of “Taiwan independence” and provocation.

Such conduct is utterly without a bottom line and deeply contemptible. Hope going forward May 2026 marked the 80th anniversary of the opening of the Tokyo Trials. Eighty years ago, this historic trial established that Japanese militarism had launched a war of aggression and exposed the numerous crimes committed by Japanese aggressors in many Asian countries.

The Tokyo Trials upheld the conscience of humanity and delivered historical justice. Together with the Nuremberg Laws, they permanently nailed the fascist war criminals to the pillar of historical disgrace. The historical justice embodied in these two great trials must not be denied, the legal force of their judgments must not be challenged, and the foundations they laid for the postwar international order must not be shaken.

“To forget history is to betray it.” Any words or actions that attempt to rehabilitate the crimes of militarism and fascism constitute a desecration of human conscience and international fairness and justice. They will inevitably meet the resolute opposition of peace-loving people throughout the world and will inevitably be brought before the judgment of history once again.

Taiwan’s return to China is one of the great achievements of World War II, and an important part of the postwar international order. Upholding the one-China principle is not only a consensus of the international community but also an essential obligation for safeguarding the postwar international order, which brooks no challenge.

The Chinese people have the firm resolve, full confidence, and sufficient capability to resolutely thwart all schemes aimed at interfering in China’s internal affairs and obstructing China’s reunification. During World War II, the Chinese and Jewish peoples stood side by side against tremendous hardships and forged a profound friendship.

We deeply remember the pain of history and jointly safeguard historical truth. The emergence of any signs of moving against the tide of history warrants our heightened vigilance. We hope our Israeli friends will see the situation clearly, fully understand the facts concerning the Taiwan question, recognize the sinister intentions and political schemes of the “Taiwan independence” separatist forces, and understand and support the efforts of the Chinese government to achieve national reunification.

The writer is the Chinese ambassador to Israel.

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The report did not address the proportion of Israelis returning in 2025. The newspaper said the decline coincides with recently published data by Israel’s Central Bureau of Statistics and academic researchers showing a sharp increase in the number of Israelis leaving the country.

“The study also addressed a series of bureaucratic, economic, and social challenges that make it difficult for Israelis to make a decision to return,” the newspaper said. These include long waiting periods to obtain state health insurance, fewer benefits compared with new immigrants, employment challenges and difficulties integrating children into the education system.

READ: Arday backed Palestine; man behind witch hunt believes in racial hierarchy and supports Israel Yedioth Ahronoth said the average annual number of returning Israelis stood at around 9,300 between 2008 and 2012, before falling to around 7,400 between 2013 and 2020.

“There has been a steep decrease in the number of returnees from about 8,000 in 2020 to about 3,800 in 2024 – the lowest number in recent years,” it said. According to the newspaper, the report said the steepest decline occurred in 2023, without providing further details.

The drop in return migration also contributed to Israel’s migration balance deficit between 2022 and 2024, which measures the difference between those entering and leaving the country. According to Central Bureau of Statistics data cited in the report, Israel recorded a migration deficit of around 140,000 people over those three years.

The newspaper said North America has long accounted for the largest share of returning Israelis, but the number returning from there has also fallen sharply. Around half of all returnees between 2005 and 2024 came from North America, while another 13% returned from Britain, Germany and France, and 6% from Russia and Ukraine.

The number of returnees from the US dropped significantly, from around 3,700 in 2020 to only 1,500 in 2024. “The proportion of residents returning from Russia and Ukraine increased significantly in 2022 to 9% from Ukraine and 8% from Russia of all returnees, apparently due to the Russia-Ukraine war,” the newspaper said.

Location: Israel
Mehdi Editor