Trump still has no solution for oil markets

Since war broke out on February 28, 2026, the Strait of Hormuz has been severely restricted, with shipping traffic dropping by roughly 90 to 95 percent. Before the war, about 138 vessels passed through daily, carrying 20 percent of the world’s oil supply. By early March, traffic had dropped to nearly zero. As of mid-March, only about 5 to 10 non-Iranian vessels per day were making the passage, causing energy prices to skyrocket around the world.

Brent crude oil was $112 per barrel on Friday, a significant increase from the $71 per barrel it was before the war began. Washington’s latest solution to bring down oil prices failed before it could even start.

On Friday, the U.S. Treasury Department issued a 30-day sanctions waiver allowing the delivery and sale of Iranian oil that it said was already loaded onto vessels at sea. A general license permitted transactions related to Iranian crude and petroleum products loaded on or before March 20, 2026, effective until April 19, 2026. U.S. Treasury Secretary Scott Bessent stated this was a “narrowly tailored, short-term authorization” aimed at stabilizing global energy markets and expanding energy supply, rather than benefiting Iran economically. “We are going to use Iranian oil against them,” he said during an interview with American media. Iranians, however, made it clear less than 24 hours later that they had no oil to inject into the market, even if they wanted to.

“Currently, Iran essentially has no surplus crude oil stranded at sea or available for other international markets,” wrote Saman Ghoddoosi, spokesperson for the Iranian Oil Ministry, on X. “Bessent’s statement is purely to create hope for buyers and to psychologically control the market,” he added.

Since the United States left the Joint Comprehensive Plan of Action (JCPOA) and reimposed heavy sanctions on Iran in 2018, Iran’s oil industry has been forced to adapt. Traditional buyers in Europe and elsewhere pulled out due to fears of U.S. penalties. As a result, Iran shifted its focus almost entirely to China.

Today, China buys the vast majority of Iranian oil exports—roughly 85 to 90 percent. In 2025, that amounted to around 1.3 to 1.6 million barrels per day, sometimes reaching levels not seen since before the sanctions. Most of this crude goes to China’s independent “teapot” refineries, which have stepped in where state-owned enterprises have tread cautiously. Rather than simply selling whatever it can, Iran now produces oil according to the specific needs of the Chinese market. Over the years, the two sides have built a stable, parallel system. According to reports by Chinese media, Iranian oil exports to China have continued uninterrupted since the war began, with Iranian tankers transferring their usual cargo to China.

No outside help

Trump’s first proposed plan—to get other countries to force the Strait of Hormuz open—continues to hit a stone wall.

On March 16, Trump made his first public plea for military assistance in the Strait of Hormuz. Speaking from the Oval Office, he called on NATO allies and other nations to send warships to escort commercial vessels through the vital waterway. “We need our allies to step up,” Trump told reporters. “This is a global problem, and they should be helping us solve it.”

The response was swift and overwhelmingly negative. On the same day, Australian Transport Minister Catherine King flatly rejected the request, stating: “We’re not planning to send a ship. We’re well prepared here to weather the economic crisis, but that’s not something we’re contributing to.” Two days later, Japanese Prime Minister Sanae Takaichi addressed her parliament, saying: “We have no plans at this point. I intend to convey that what cannot be done cannot be done.”

By March 19, Trump’s frustration boiled over. On Truth Social, he lashed out: “Without the U.S.A., NATO IS A PAPER TIGER! COWARDS, and we will REMEMBER!” Hours later, Russia issued a formal warning. Foreign Ministry spokesperson Maria Zakharova declared that any nation joining the U.S. coalition would, “under international law, become parties to the conflict and accomplices in U.S. and Israeli aggression against Iran.” That same day, a joint statement from the UK, France, Germany, Italy, the Netherlands, and Japan condemned Iran but conspicuously avoided any military commitment. EU foreign policy chief Kaja Kallas added: “Europe has no interest in an open-ended war. This is not Europe’s war.”

Facing near-universal rejection, Trump reversed course on March 20, posting: “We no longer ‘need,’ or desire, the NATO Countries’ assistance — WE NEVER DID!”

Occupying Iranian islands

After failing to get allies to help open the Strait of Hormuz and seeing his military strikes fail to stop Iran, Trump is allegedly considering another impossible plan: occupying Iranian islands. According to U.S. officials who spoke to Axios on Friday, Trump is weighing sending American forces to seize or blockade Kharg Island, Iran’s main oil export terminal. Kharg Island sits about 15 miles off Iran’s coast and handles roughly 90 percent of Iran’s crude oil exports. The idea, as one source speaking to Axios put it, is to “get them by the balls and use it for negotiations.”

To carry out this plan, the U.S. has begun moving Marines to the region. Over 2,000 Marines from Okinawa, Japan, are heading to the Persian Gulf aboard the USS Tripoli, an amphibious assault ship carrying F-35 fighter jets. Another 2,200 to 2,500 Marines from California are following on the USS Boxer. The buildup suggests Washington is preparing for a ground operation.

But this plan is not likely to work. The first problem is geography. Kharg Island is well within range of Iran’s anti-ship missiles and drones. Any amphibious assault would face heavy resistance. Retired Marine Colonel Mark Cancian warned in remarks to independent American media, “There are going to be [U.S.] casualties, because the Iranians will fight back.”

Even if U.S. forces manage to capture the island, experts say it would not deliver the strategic victory Trump wants. Retired Rear Admiral Mark Montgomery explained that seizing the export terminal does not control Iran’s oil production. “If we seize Kharg Island, they’re going to turn off the spigot on the other end,” he said, calling the operation “significant danger without offering a clear strategic payoff.”

Iran has also made clear it will retaliate. After earlier U.S. strikes on Kharg Island, Iran’s Army Headquarters warned that any attack on its oil sites could trigger broader attacks on energy facilities across the Persian Gulf region. This means the operation could escalate the conflict rather than end it.

Finally, pulling thousands of Marines from Japan weakens America’s military presence in the Pacific. Experts warn this sends a negative message to U.S. allies about America’s commitment to that region. Between the military risks, the questionable payoff, and the strategic costs, Trump’s plan to occupy Iranian islands appears destined to fail, like all his previous ones to force the Strait of Hormuz open.