The United States on Thursday said that it could maintain a naval blockade of Iran indefinitely and would ratchet up economic pressure on Tehran as ceasefire talks have floundered, global oil supply is dropping and regional tensions are rising.
Defense Secretary Pete Hegseth told reporters that the US military has the capability to maintain a naval presence in the region to enforce its blockade of Iran, which has inflicted severe economic damage on the country, reported Reuters.
"Indefinitely the United States Navy can maintain a blockade like that because we'll rotate ships in and out, as we have, and we'll continue to," Hegseth told reporters during a trip to Panama.
Treasury Secretary Scott Bessent said on Thursday that the United States planned to inflict more financial damage on Iran.
"Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country," he said in an interview on Newsmax's "Rob Schmitt Tonight" program.
With a tentative June deal to end the war in tatters, Iran has sought to exert leverage on Washington in return by controlling the Strait of Hormuz.
It has attacked some vessels trying to transit the strategic waterway, through which a fifth of the world's oil and liquefied natural gas traveled before the war began in February.
US President Donald Trump is under pressure at home to end a war that is deeply unpopular, with high fuel prices dragging down his approval ratings and potentially eroding his party's control of Congress in midterm elections in November.
Trump has repeatedly asserted that the US has "total control" over the strait, prompting Iranian denials. Tehran has said it will not allow the waterway to reopen until its conditions are met. These include removing economic sanctions and releasing frozen Iranian assets.
Shipping traffic through the Strait of Hormuz fell to eight vessels on Tuesday, compared with a 10-day average of about 12 vessels, and 130 to 140 ships before the war.
The US lifted its blockade of Iran's shipping and ports for a month in mid-June but has since reimposed it, cutting off Tehran's primary source of hard currency and compounding earlier losses from wartime strikes on its energy infrastructure.
Washington previously said it would lift the Iranian blockade once Iran and Oman, which sit on either side of the strait, reach an agreement to restore commercial shipping.
SHRINKING OIL SUPPLY Trump has also repeatedly threatened to escalate military strikes and "hit Iran hard," although he has thus far resisted deploying ground troops or seizing strategic islands and bombing desalination plants. Earlier this week, Trump suggested he would rely on economic means, rather than military action.
The US has tightened economic sanctions against Iran and other individuals and entities that it says are helping it procure weapons, but the pressure campaign has failed to bring Tehran back to the negotiating table.
Stress is mounting on the global economy. The International Energy Agency on Wednesday forecast that global oil supply would fall by 4.3 million barrels per day, or around 4%, this year.
Just a month ago, the agency had forecast a drop of 3.7 million barrels per day.
Oil prices settled down more than 2% on Thursday after a week of gain, as investors focused on signs of weaker global demand and a sharp increase in US crude inventories.
Global economists have forecast a sharp drop in global growth as a result of the war, and potentially a swing into recession in some areas, warning that the impact will grow if the war is not ended soon.
Hegseth declined to comment on a question about whether, in retrospect, it was a mistake to declare a ceasefire in April, a move that ended high-tempo bombing of Iran in exchange for peace negotiations that have failed to resolve the conflict.
"I'm never going to comment on that. We're doing exactly what we need to, to ensure that Iran never has a nuclear weapon," Hegseth said.
