The three-week-old air campaign against the Iranian regime has reached a dire strait. Following the elimination of the Islamic Republic’s supreme leader, Ali Khamenei, and the degradation of the IRGC’s command structure, Tehran has reached for its final, most desperate weapon – closing the Strait of Hormuz.
With the effective closure of the strategic waterway driving Brent crude toward $120 a barrel and the looming fear of stagnation in the straits, the “Hormuz crisis” is no longer just a regional blockade but a global predicament.
It poses a major challenge to the global economy and is central to Iran’s strategy in this war. By driving up oil prices, the regime hopes to mount significant international pressure on the US to force the end of the air campaign against it.
While Iran intended for the closure of the strait to act as a noose around the neck of the global economy, this could, with the right approach, be a lifeline to the opposition in Iran.
If the proceeds are funneled to a provisional government body led by exiled Iranian Crown Prince Reza Pahlavi, the current figurehead of the opposition, seizing Iranian oil tankers currently traversing the Persian Gulf and strategically waiving sanctioned Iranian oil already in East Asian markets could be turned into a game-changing loss for the oppressive regime.
Currently, roughly 140 million barrels of oil belonging to the Islamic Republic are on the high seas and under sanction by the US, preventing their sale, mainly to clients in East Asia. However, releasing the stock to a body controlled by Pahlavi could serve three main purposes.
The first is that oil prices on the global market would be lowered. Oil prices have fluctuated significantly, from nearly $80 a barrel to $120 a barrel, straining transportation costs and posing a problem for the global economy.
Releasing the stock will bring down oil prices substantially, remove pressure on the global economy, and negate the downsides of other alternatives, such as waiving sanctions on Russian oil or depleting strategic oil reserves.
The second is that legitimacy to a new Iranian government would be provided, furthering the goal of regime change.
One of the unofficial goals of this war is to replace the hostile radical Islamist regime with a moderate pro-Western one. By waiving sanctions under these conditions, the US would, de facto, recognize a provisional government led by the son of the former shah, considered by many as a true friend of the West.
It would also force world governments into a dilemma: either accept rising domestic oil prices or recognize the new Iranian government.
Both alternatives are advantageous to those fighting the regime, as they would punish those unwilling to support a new government by recognizing it, while rewarding those who do with lower oil prices.
Sanctioned oil could help finance a new Iranian government
Thirdly, waiving sanctions would augment the opposition by providing a vast war chest. At current prices, the sanctioned oil is worth $10-$14 billion. This would go a long way toward leveling the economic capabilities gap between the regime and the opposition, and can be used to support independent, large operations by the opposition, allowing it to be more effective in its internal campaign against the Islamic regime.
Crucially, this can solve the historical woe of the Iranian opposition – disunity. Providing this economic boost to a centralized body forces disparate ethnic and ideological groups to coordinate under a single, economically dominant entity.
The Islamic Republic has played its final card by holding the world’s energy supply hostage. But in its desperation to choke the global economy, the regime has inadvertently provided the very capital needed to fund its own replacement.
By transferring the stewardship of Iran’s natural resources to a legitimate provisional body under Pahlavi, the West can do more than just lower gas prices; it can provide the Iranian people with the tools to reclaim their nation.
The Trump administration must realize that the price of oil is not just a crisis to be managed, it’s a strategic opportunity.
The writer is an independent researcher and analyst studying political science and history at The Hebrew University of Jerusalem.