Front Burner - Dueling blockades hold global economy hostage

Episode Date: April 16, 2026

The energy crisis spurred by Iran’s closure of the Strait of Hormuz is wreaking economic havoc on much of the world; especially in Asia and Europe, where shortages have already forced people to ration fuel, travel less for work, and pay more for food. And it could all get even worse, because this week, after ceasefire talks fell apart, the Trump administration imposed a blockade of its own. Now, as both countries play a high stakes game of chicken on the Strait, many questions remain. What ships can and can’t be allowed through? Will the blockade actually pressure Iran to capitulate? How much worse could this crisis get? We’re joined by Ian Ralby, a leading expert in international maritime law and security. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

I'm Lisa Yuso, a digital producer at Ideas, the podcast that likes to feed your curiosity. I ask my colleagues why they think you should listen. Ideas can make you the smartest, most interesting guest at your next dinner party in less than 60 minutes. It's got the best of a storytelling podcast with the best of a great lecture. You can pretty much never predict where an episode will take you, but you can count on every episode to shift your perspective. even just a little. Find and follow ideas wherever you get your podcasts. This is a CBC podcast. Hey, Aaron Werry here filling in for Jamie.

The energy crisis spurred by Iran's closure of the Strait of Hormuz is wreaking economic havoc on much of the world, especially in Asia and Europe, where shortages have already forced people to ration fuel, travel less for work, and pay more for food. And it could all get even worse, because this week, after ceasefire talks, fell apart, the Trump administration decided to impose a blockade of their own. Here's Vice President J.D. Vance speaking to Fox News on Monday. When it comes to weapons of war, what they have done is engaged in this act of economic terrorism against the entire world. They basically threaten any ship that's moving through the Straits of Hormuz. Well, as the President of United States showed, two can play at that game. And if the Iranians are going to try to engage in economic terrorism, we're going to abide by a simple principle that no Iranian ships are getting out either. Now, as both countries play a high-stakes game of chicken on the straight, many questions remain.

What ships can and can't be allowed through? Will the blockade actually pressure Iran to capitulate to the U.S.'s demands? And how much worse could this crisis get? To get into all of that with me, I'm joined by Ian Ralby, a leading expert in international maritime law and security. He's in Baltimore, Maryland. Hi, Ian. Thanks for joining us. Pleasure to be with you. So, Ian, the blockade came into effect on Monday.

Trump originally said on true social that it would be a blockade on traffic in and out of the strait. But U.S. Central Command clarified soon after that, it would only apply to ships and tankers going to and from Iranian ports, and they would allow ships to pass if they were headed to ports belonging to any U.S. allies in the Gulf. What kind of movement have we seen in the strait since then? Well, we've seen very limited movement. We have heard at least statements from CENTCOM indicating that they have turned several

ships back to Iranian waters, but it does appear that about eight ships have come through the strait itself over the last two days. And so it is a very, very slow trickle of vessels, much lower than the amount even before this blockade was put into place. And certainly a very small percentage of the 130 to 150 that were going through a day prior to the 28th of February. So as I understand it, a blockade is an act of war. But is there still a legal framework for a blockade that the U.S. is supposed to be operating within? Absolutely. There is a very, very clear distinction between blockade in a colloquial sense and blockade in a legal sense. Blockade in a colloquial sense has been used over and over and

unfortunately has blurred some of the understandings of it because we've talked about a hunger blockade in the Black Sea. We've talked about a blockade of both Venezuela and Cuba. We've talked about the Iranians having been engaged in a blockade in the Strait of Hormuz. none of those were officially blockades under the law of naval warfare, which is very specifically defined and is summarized in either the San Remo manual or the Newport manual, both of which are available online for anybody who's interested. But the point is that there are criteria that have to be met for a blockade to be officially a legal construct under the law of naval warfare. And those include designating it in a very clear sense, declaring it with a geographic

and time-bound nature, identifying some of the constraints to allow for humanitarian aid to come through impartiality and, importantly, both proportionality and effectiveness. And so some of the elements are not just in the declaration, but also in the implementation. And we have to wait and see how that actually plays out in order to know whether a blockade is legal in practice, as well as on paper. It can't just be a paper tiger. For ships looking to pass through the strait, what kind of danger are they facing at this point from both the U.S. Navy and Iranian forces? What we have now are two different impediments to transit passage through the strait. Now, normally, international straits, no matter who is on either side, have a degree of international personality under the law.

In other words, vessels of any character from anywhere are normally able to transit through that waterway. without impediment. Anything that hampers that is technically illegal. And so when we saw the Iranians move to close the Strait of Hormuz by attacking ships, by declaring that it was closed, that was illegal. And then the toll booth scheme on top of that to allow essentially a filter under their discretion and with payment in yuan to the IRGCN was equally illegal. But now we have, on top of that, a seemingly legal blockade that nevertheless prevents further movement of vessels in and out of the area. Now, the blockade itself is focused not on the strait, but on the ports of Iran. But the effect is that with these two different layers, the aggressive

approach of Iran in terms of attacking ships and the legally aggressive approach of the United States in implementing this blockade means that the practical side of things is that we have a near complete closure of the Strait of Hormoves. There's been obviously conversations about the mines that Iran has suggested in the strait. The U.S. military has said their warships will work to locate them. But what kind of risks do those mines pose? So there are a couple layers to this. First of all, it's very difficult in all of this to distinguish rhetoric from reality.

But in terms of the potential for mining, a caution is required. Once there is an allegation that mines have been put in the water, it's worth being sure before trying to send a commercial vessel through or any vessel. And that means that countermining measures are required. Iran has also published a map indicating what they think should be the transit separation scheme, which would actually use Larak Island as the north and south boundary for ships coming through the strait, which means everything would be routed through Iranian territorial waters. And part of the rationale given for that is a designated danger zone in the center of the strait, which is where they alleged to have placed mines. But yes, the countermining measures are not without incredible danger and risk. First of all, mining vessels are countermining vessels are sitting ducks.

But equally, there's a potential for something to go wrong at any time. And so there is a risk both to the Navy and to the overall fragility of the situation and the ceasefire if something were to occur on that front. Before talks fell apart, Iran was looking to formalize its whole. on the Strait of Hormuz. Their 10-point ceasefire proposal included collecting tolls from ships passing through the strait in order to help them pay for the damages from the war. Trump says he told the U.S. Navy to stop any ships that have paid what he calls an illegal toll to Iran. But not long ago, he talked about treating the Strait of Hormuz as a, quote, joint venture. According to Jonathan Carl of ABC News, Trump said, quote, we're thinking of doing it

as a joint venture. It's a way of securing it, also securing it from lots of other people. It's a beautiful thing, unquote. What would a toll regime in the strait of Hormuz mean for the movement of oil and goods around the world? Well, not to be overly blunt, but it would be a very ugly thing for global maritime commerce. So it might be very attractive for the parties involved, but when the economic realities of it all play out, I think it would be seen to be a very, very bad move. The reason is twofold.

Number one, we have a fundamental principle of maritime law that, that, that tries to safeguard freedom of navigation without impediment. And that freedom of navigation is born of the need for ships to be able to move between countries, between ports all around the world in order for the 90% of world trade that moves by sea to move as inexpensively and as quickly as possible. Our entire ecosystem of economic activity is driven by that maritime domain, whether we recognize it or not. From our food to our clothes, to our medicine, to our supplies, to our technology,

to almost everything that we use and interact with on a daily basis. there is a maritime nexus. And if we start to impose different measures that seem to be financially beneficial in the short term, they become very ugly in the long run because the price of everything gets to be incredibly high. And one of the secondary issues, so in addition to that initial concern for imposing an impediment to freedom of navigation, is that it opens the door to others doing it as well. So why shouldn't Singapore and Indonesia? Why shouldn't Morocco and Gibraltar and Spain. Why shouldn't other critical choke points start engaging in similar behavior to charge for transit passage, which is a fundamental right under the law today. And so if we if we join in this effort

to hamper the traffic through an international street, we open the door to a complete upheaval in the international maritime legal system, which is the foundation of our global economy. And it will not end well for for most economic actors. As far as we know, what exactly is the U.S. hoping to accomplish with their blockade? One of the things that is very difficult to discern in all this is what the U.S. end state is. Part of that is that the rhetoric out of Washington has changed at least a dozen times in the last several weeks and months. And so it is unclear what the goal is.

And the goalpost seemed to keep moving, which is partly why I think the Iranians have become frustrated. Because prior to the start of the war, there was an ongoing negotiation moderated and mediated by the Omanis that seemed to be moving in a very promising direction. According to the Omani Foreign Minister, a lot of the concessions that the U.S. was demanding at the time were being offered by the Iranians, and then all of a sudden they stopped short and the war began. And so the U.S. and Israeli strikes literally blew up those negotiations

and ended what seemed to be a movement towards a denuclearized Iran with some degrees of relief and stability for the economic sanctions and pressure. that they've been put under for years. Now we have a completely different situation where the Iranians have gained a strategic leverage over the Strait of Hormuz in a level that we've not seen them really execute in the past. And now everybody's trying to push back against that

with sliding goalposts again. And so we've heard rationales from self-defense to protection of Israel to decimation of capability to decimation of the nuclear capability to long-term prevention of nuclear resurgence to opening the Strait of Hormuzer. moves to all kinds of different things, including regime change, all being talked about as the rationales for why the U.S. is doing what it's doing. And so that lack of consistency and clarity

in just the narrative alone has, I think, led many to wonder what the desired end state, if any clear end state is in mind, actually is. And so it's, I think, difficult to see what a resolution would look like at the moment. But there are certainly entrenched positions on both sides that seem yet to be to be met in the middle. And it's unlikely that the next round of negotiations will put everything back to status quo ante. We are likely to see some long-term effects of this, no matter what comes of the negotiations, that will change the picture for both maritime commerce and security in the region for weeks, months, and years to come. A digital producer at Ideas, the podcast that likes to feed your curiosity.

I ask my colleagues why they think you should listen. Ideas can make you the smartest, most interesting guest at your next dinner party in less than 60 minutes. It's got the best of a storytelling podcast with the best of a great lecture. You can pretty much never predict where an episode will take you, but you can count on every episode to shift your perspective, even just a little. Find and follow ideas wherever you get your podcasts. So according to the New York Times, Iran has agreed to suspend nuclear enrichment for five years. The U.S. wants them to suspend it for at least 20 years.

But if the idea is to get Iran to agree to the terms laid out by J.D. Vance during the latest round of talks in Islamabad, have we seen the Iranians budget all since the start of the blockade? How have they responded? No. The Iranians have a very well-defined tolerance for pressure. They've been under pressure since 1979 when the Islamic Revolution occurred. And though that pressure has been increasing over the years, particularly since about 2018 when the U.S. left the JCPOA under the first Trump administration. And so we've seen a maximum pressure, maximum sanctions campaign put against them. And what they have done is two things. One, figure out how to be resilient. in and of themselves. And so they've worked hard to make sure that the 93 million people who live in Iran are able to continue to survive and avoid this being an existential threat to them. But they've also, in more recent years, developed a network of relations and relationships that have a potentially problematic situation now for the United States.

Iran has become a member of the BRICS. Brazil, India, Russia, and China were the initial four countries that were kind of designated as the future of the developing economies of the world. South Africa was then added as a fifth state. And now there are 11 states, including Iran, which account for 46% of the world's population. And they've been figuring out not only how to trade off the dollar, which they've been implementing just this year with off dollar payment systems between the BRICS members, which means trading can occur without involvement of U.S. regulatory oversight, as well as

naval exercising, which just occurred in January. between most of those member states. And so this is a formidable set of relationships that could help ensure that Iran's ability to withstand U.S. pressure is perhaps more than the U.S. would like. And just as Russia has not only survived the sanctions that have been put on it from the last few years, with China's backing and with Iran's help, they've actually thrived to the point of having budgetary surplus at times. And so this is not something that is entirely in the hands of the U.S. to dictate.

the Iranians have resilience mechanisms and they're likely to pull as many levers as possible to ensure their own survival. There's another argument here that what Trump could be hoping to do is squeeze China, which receives almost half of its oil imports through the strait into getting Iran to capitulate.

And China has spoken out against the blockade and called it, quote, dangerous and irresponsible. But they're also one of the most energy-secure countries in the world and they've been benefiting from the surge in demand for renewable energy during this one. war. Are we seeing any indication that China might get more involved here? China is involved, and I think China has some critical equities, but they're not what the U.S. is necessarily thinking about. And the way the administration seems to be viewing China is

that they need the physical oil, and therefore, they should get involved in physically reopening the strait. That, however, is far from the Chinese position. In fact, the Chinese Navy, which has a naval base nearby in Djibouti, has not gotten involved kinetically in any of the situations in the region over the last few years. They did not even assist ships that were hit by the Houthis that were right next to them. And so it is very, very unlikely that they would ever have gotten involved kinetically. But furthermore, they have incredible diplomatic and economic ties to the region now that they are pulling on. In fact, the whole Tolbu scheme from Iran has been made payable in Chinese yuan, which means the Chinese government

is essentially helping that process of normalizing and formalizing. payments for transit passage, which should be a right under international law and not something that they could charge for. So the Chinese definitely have a stake in that. And additionally, they were responsible for the reproachment between both Iran and Saudi Arabia just a few years ago in 2023. And so they see themselves as a peacemaking diplomatic force in the region, as well as a major economic driver. And so their likelihood of being involved kinetically is very low. Their likelihood of being involved strategically is extremely high. And so China is unlikely to be persuaded that the physical movement of oil and gas commodities

through the strait is sufficiently critical to them that warrants some kind of major change in their approach. They're going to maintain an effort to focus on the bricks and to ensure the economic survivability of one of their key relations. Meanwhile, adding to this puzzle, the Wall Street Journal is reporting that Saudi Arabia has been pressuring the U.S. to stop the blockade. What are they most concerned about here? Well, Saudi Arabia has been attacked extensively and their ability to access export markets is hampered by both the closure of the Strait of Hormuz, effectively, and the diminished activity in the Red Sea. And so they're now facing maritime decreased activity on both fronts. They have a large population that needs access to food,

It needs access to supplies, which aren't coming through the Gulf at this point. And so Saudi Arabia has perhaps an acute desire to see the whole conflict simmer down. And so the U.S. engaging in an active war to escalate during a ceasefire seems not to have sat well with the Saudis, which are definitely praying for some kind of return to a degree of free flow and normalcy through the Strait of Hormuz. The economic impact has been immense. This has already been called the worst energy crisis in history by the International Energy Agency. What specifically has been the added impact of this U.S. blockade on markets in the global economy? So we're seeing the pricing of crude as one issue.

We're seeing the availability of oil and gas supplies as another. And we're seeing knock on consequences as the third. So let's start with the pricing. oil and gas is priced and not based on immediate supply and demand, but on global schemes. So if the United States is energy independent, if Canada is energy independent, it doesn't matter because the price of oil and gas supplies nevertheless are globalized. And so that's why we're seeing huge increases at the pump in the North American markets. And so whether there is enough or not is irrelevant to the point of price.

Secondarily, though, the access is hugely critical for Asian markets as well as for the European jet fuel market to that Middle Eastern oil. And so what we are seeing is shortages in key places where violence is breaking out at fuel pumps, where flights are being canceled, where travels being curtailed. And so the diversity of challenges on that fuel shortage is incredibly important. And then tertiaryly, we have to remember that as the price of oil and gas goes up, the price of everything, else goes up. As I said, 90% of world trade happens by sea. And with that, we have oil and gas that need to be going into ships and trucks and trains in order for the movement of goods to continue freely. And once that price point reaches a certain level, we end up seeing a major increase in the price of everything. And so this is where we have a cascading set of issues from the price to the

availability to the price of everything else to the conflict then that arises as a result of that humanitarian crunch. And so this is this is not only an energy issue. It's the energy knock-on consequence that that is going to create a huge degree of pressure on the global economy and humanitarian crises in certain pockets. President Trump told Fox business that the gas prices may be the same or, quote, a little higher around the time of the upcoming and crucial midterm elections in the United States in November. This has, you know, obviously and understandably been a worry for members of the Republican Party. If the global impact of this conflict wasn't incentive enough to reach a resolution,

what about the potential for just basic domestic political blowback? I think understanding American politics has become incredibly difficult in recent years because some of the metrics by which we assess rational decision-making have been thrown out the window. And so it is very hard to determine what the motives and motivations of different actors would be to campaign in one way or another, and what the motives and motivations of voters would be to choose one or another candidate. And so I think it's overly simplistic to suggest there's a formula that energy prices up bad for the political party in power. And I think it would be very preemptive to suggest that if gas prices stay where they are. it means a complete change in the political landscape. There are other factors.

There are other issues. Now, some of those other factors do include concerns about entanglements and foreign wars, concerns about the access to other support mechanisms when critical goods become unaffordable. But thus far, it is a very complex political landscape. And we're in April. Elections are in November. A lot could happen between now and then.

So it's impossible to forecast that at this point. Yeah, and I'm not going to ask you to make any predictions at this point of how this resolves itself. But in a piece for foreign affairs, Nate Swanson, a former member of the Trump administration's Iran negotiating team, wrote that the success of the U.S. blockade will be determined by, quote, whether Iran can endure more short-term economic pain than the United States. Do you think that's a fair assessment of where we're at? Absolutely. This is a game of chicken. And we'll see who blinks first.

But unfortunately, the U.S. has not had a huge amount of pressure put on it in recent decades, whereas the Iranians have had to live with a degree of austerity because of the maximum pressure campaign and all the sanctions that have been imposed. So the not only ability, but stomach for resilience amid hardship, is perhaps far more acute in Iran than it is in the United States. And so the patience for hardship is much lower in the United States. this point than it perhaps needs to be in order to face a situation as critical as this. Thanks very much, Ian. Pleasure. That's all for today.

I'm Aaron Wary and for Jamie Plessom. Thanks for listening to Frontburn. For more CBC podcasts, go to cbc.ca.com.