A MARTÍNEZ, HOST:
For more on the U.S. blockade, I'm joined by Jason Bordoff. He's the founding director of the Center on Global Energy Policy at Columbia University. He was also senior director for energy and climate change on the National Security Council during the Obama administration. Jason, U.S. Central Command, which is enforcing the blockade, says it has been, quote, "fully implemented." From what you can tell, is it working? Is that blockade working?
JASON BORDOFF: It seems to be. We're hearing reports of maybe a handful, a trickle of tankers making their way through. But compared to the roughly 140 tankers before carrying crude and oil products, that's fallen to close to zero. Before this blockade, as your report just said, we had Iranian oil that was still moving through and a little bit of oil that Iran allowed through, and that's now fallen. So we've lost an additional roughly 1.5 million barrels on top of what had been lost before. Some of it has rerouted in other ways.
MARTÍNEZ: So the fact that the product isn't making its way toward its destination - that's one way to tell that it's working.
BORDOFF: Yeah. And there's also satellite data, and you can try to track how many ships are making their way through. But the world has lost an enormous amount. I mean, as your report said, this is the largest oil supply disruption in history. About 20 million barrels of oil and product moved through before. Of that 15 million of crude oil, maybe 5.5 million were finding other ways to market. But that disruption has now increased by another 1.5 million barrels a day or so because Iran is no longer able to export into the global market.
MARTÍNEZ: What if ships turn off their transponders? Is it possible for these vessels with ties to Iran to slip past the U.S. blockade?
BORDOFF: You know, we're getting, again, reports via satellite that maybe a handful of ships, 10 to 20 a day, are doing that - maybe getting permission, taking some circuitous route with or without Iranian permission. But it - even with mechanisms like that, you're talking about a pretty small trickle of supply. Supply through the Strait is effectively closed, which is why the - even though the spot price, the sort of price people see posted for oil, is still not hugely expensive, there's physical shortages that are showing up around the world. And the physical price people are paying for oil is shooting up rather quickly.
MARTÍNEZ: What do you think of the strategy - the blockade as a good strategy to ultimately force Iran to reopen the strait?
BORDOFF: Well, I think what we know about it - it seems like a game of chicken. Who can bear pain the longest? Iran is trying to impose pain on the world by closing the strait and pushing up the global price of oil until the rest of the world and the United States blink. And now the United States is trying to do that to Iran to bring their oil revenue close to zero. What we know about the history of sanctions on Iran - you know, in the first Trump administration, they used financial sanctions, not a physical military blockade, to bring Iranian oil exports not to zero, but close to it. They brought it down, you know, to a couple hundred thousand barrels a day, and Iran was able to bear that pain for quite a while. So I think if the goal here is for Iran to blink in the next few weeks, history doesn't suggest that's going to happen.
MARTÍNEZ: If, indeed, this is a - this blockade strategy is a war of attrition, in a way, as - you know, as who can withstand the pain the most, who has the advantage? I mean, the United States is way across the world in the strait. But meanwhile, Iran is pretty much playing a home game.
BORDOFF: Yeah. Iran has maybe a month or two before it has to start shutting in production. It runs out of storage when it shuts in production. That can do damage to its oil production capability for the long term in ways that will be quite painful for Iran. But again, this is a regime that's shown an ability to withstand pain for quite a while.
And I think globally, again, even though the global oil price is around $100 a barrel, that does not yet reflect in the next month or two the physical shortages that are going to increasingly get more severe, show up in the United States and in the price we're paying at the pump. And it's just a question economically and politically, with a midterm election approaching, about how long the Trump administration is willing to withstand that if we start to see more and more economic pain at home, which I think is coming if we don't reopen the strait.
MARTÍNEZ: I saw that Iran does have ports outside of the Strait of Hormuz. Do these ports have the infrastructure needed to export oil and gas?
BORDOFF: Not really. There's this Jask port just outside the strait, but that has pretty small capability that has barely been tested. And even that would still run into the problem of a physical military blockade, given where the U.S. has positioned that blockade. So Iran does not have a lot of other options to get its oil to market. Saudi Arabia has a pipeline that can reroute about half of its oil exports. It was exporting about 7 million before. Today it's about 4. The United Arab Emirates has also been able to continue to export about half of its oil from pre-war levels via some pipelines that go around the Strait of Hormuz, but we're using all of that capacity now.
MARTÍNEZ: Really quick answer here. If the Strait were to open this week, how long would it take to replenish supplies for the world?
BORDOFF: You're talking about a couple of weeks to a month or two, I think, to try to get the global system back to normal, 'cause we haven't yet significantly damaged the oil infrastructure in the region. But if this escalates, that's the worry. You start to physically damage the infrastructure as missiles fly back and forth.
MARTÍNEZ: Jason Bordoff is with the Center on Global Energy Policy at Columbia University. Jason, thanks.
BORDOFF: Thank you. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
