Brent crude oil surged to US$126 (£94) a barrel after US president Donald Trump announced that he was willing to prolong the blockade of Iranian ports for “months if needed”. This conflict has been billed as a matter of who can absorb the most pain. And Trump is betting on it being the US.
Trump has been rather bullish in his public pronouncements of late, declaring that Iran is in a “state of collapse”. Reports that the country’s inflation rate has risen to 50% from 40% since the war began at the end of February would seem to back this assessment.
The damage done to Iran’s economy will be made worse if the country is forced to shut down oil production due to a lack of storage capacity, something Trump is also confident about. He told Axios: “The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig.”
