As anticipated, the United States and Iran failed to reach an agreement. Former President Trump announced after 00:00 Eastern Time on the 13th that U.S. forces would impose a blockade on Iran starting at 10:00 AM on April 13. The blockade will cover all Iranian ports in the Arabian Gulf and the Gulf of Oman but will not obstruct the passage of non-Iranian vessels through the Strait of Hormuz. This is one repetition among many and part of the ongoing fluctuations surrounding the U.S.-Iran conflict. The unfortunate Strait of Hormuz is now effectively under a two-way blockade. Iran has already restricted most transit capacity through the strait, while the U.S. is countering with two measures: encircling Iranian ports and intercepting vessels trading with Iran, forming a maritime containment around Iran in an attempt to suffocate its trade corridor and strangle its economic lifeline.
The Islamic Revolutionary Guard Corps of Iran issued a statement emphasizing that the Strait of Hormuz is currently under Iranian control and that any approach by military vessels will be considered a violation of the ceasefire agreement, met with a severe and firm response. With both sides posturing aggressively, this conflict is far from over. Previous analyses indicated that U.S. Army units are being deployed to Iran, and now, Air Force cargo planes are continuously flying to the Middle East. Reports from open-source intelligence accounts on platform X, cited by Zero Hedge, noted U.S. Air Force cargo aircraft heading to the Middle East late on the 12th. This situation reaffirms that the conflict is unlikely to end soon.
The core issue preventing a resolution lies internally. The former U.S. president must win this conflict to secure leadership prestige and victory in the midterm elections. Initially perceived as a certain, swift victory, the prolonged and difficult struggle, unlike the swift action against Venezuela, already represents a setback. How will a grand legacy be secured under these circumstances? Another critical factor is Israel. The recent negotiations focused primarily on nuclear issues, specifically uranium enrichment. In a lengthy post, the former president explained that talks with Iran lasted from early morning until late night—nearly 20 hours. While many achievements were made, the most significant point was Iran's unwillingness to abandon its nuclear ambitions.
Citing Fox News, Zero Hedge reported that the final proposal presented by the U.S. vice president to the Iranian delegation in Islamabad included six "red lines," mainly related to uranium enrichment: cessation of all uranium enrichment activities; dismantlement of all major nuclear enrichment facilities; removal of highly enriched uranium; acceptance of a broader peace, security, and de-escalation framework involving regional allies; cessation of funding for terrorist proxies such as Hamas, Hezbollah, and the Houthis; and full opening of the Strait of Hormuz without any transit fees. These conditions essentially demand that Iran harm itself. How could Iran possibly relinquish its commercial, military, and geopolitical interests?
A former U.S. national counterterrorism center director, once an ally but now a critic of the former president, stated late on April 12 Eastern Time that U.S.-Iran negotiations could have succeeded, but the "zero enrichment" demand caused them to fail. He urged adherence to U.S. interests rather than Israeli positions. The implication is clear: these demands do not serve U.S. interests but benefit Israeli politicians facing legal jeopardy if conflict is avoided. Iran maintains that uranium enrichment is primarily for technological sovereignty, nuclear power generation, and medical needs—rights granted under the Nuclear Non-Proliferation Treaty for peaceful nuclear energy use. Critics argue that civilian nuclear power does not require such high enrichment levels.
According to the International Atomic Energy Agency, uranium enriched to 3%-5% uranium-235 is low-enriched uranium used for nuclear power plants; uranium enriched above 80% is highly enriched uranium, and levels above 90% can be used for nuclear weapons. Iran has achieved enrichment levels up to 60%, still several steps away from weapons-grade. The U.S. demands the removal of all uranium enriched to 60%. Iran likely perceives this as leaving it without basic bargaining power, vulnerable to pressure. Given the current stance of U.S. and Israeli politicians, this outcome seems entirely possible.
As early as February 27, the day before unannounced U.S.-Israel strikes, Oman's foreign minister expressed optimism in a Washington interview, stating that Iran had agreed to "never possess nuclear materials usable for bombs" and that its existing enriched uranium would be "reduced to the lowest possible levels" in an irreversible process. Iran would also allow IAEA inspectors "full access" to verify terms. Despite such concessions, Iran still faced attack. This raises the puzzling question of why a typically assertive actor would comply so readily with Israeli demands, suggesting that in a lawless environment, rogue behavior is countered by rogue tactics.
In the short term, the former president has achieved significant gains. U.S. crude oil exports have surged temporarily, enabling substantial profits in futures, equities, and oil markets. According to energy research firm Kpler, U.S. crude exports this month are expected to jump nearly one-third from March's 3.9 million barrels per day to 5.2 million barrels per day. Asian demand surged 82%, reaching 2.5 million barrels per day. Currently, 68 empty tankers are heading to the U.S., compared to just 24 in the week before the conflict began on February 28 and an average of 27 last year—an increase of nearly threefold. Latest ship-tracking data via automated identification systems suggest the U.S. has likely become the world's emergency refueling station.
Moreover, valuations of U.S. energy listed companies have soared. Data from Dow Jones Market Data show that since the conflict began on February 28, the total market capitalization of U.S. listed energy firms has increased by $93 billion. Revenue forecasts for 2026 have been raised from $1.9 trillion to $2.1 trillion, with net profit projections potentially up 22% to $183 billion. This data brings to mind Warren Buffett's investments in energy and utility stocks, including Pacific Energy, suggesting his team anticipated these developments. From the perspective of capitalizing on the final phase of fossil fuels by selling domestic resources at high prices, the U.S. has succeeded. It can bear the short-term costs of strait closures and is a net beneficiary of rising oil prices and increased market share for its oil firms.
In contrast, 90% of Iran's oil exports rely on the Strait of Hormuz. Reports from the Iranian news agency IRNA indicate oil revenues account for 65% of the government's budget. Reuters estimated in 2024 that Iran exports 1.5 million barrels of oil per day. At $70 per barrel, daily export revenue is $105 million. Thus, each additional day the strait remains closed costs Iran over $100 million. For the U.S., the two-way blockade is a short-term cost and tactical maneuver; for Iran, it is an existential crisis.
Further reassuring the former U.S. president, Saudi Arabia's land oil pipelines have been fully restored. Reports on April 13 confirmed that the key east-west pipeline attacked on April 8 was repaired and resumed operations at full capacity, transporting approximately 7 million barrels of light crude daily to the Yanbu port on the Red Sea. Production losses of around 300,000 barrels per day from the Manifa oilfield have also been fully restored. Saudi air defense capabilities have been significantly enhanced. Reports on April 13 indicated that Saudi Arabia and other nations purchased air defense systems from Ukraine, Japan, and South Korea, including systems to intercept drones, missiles, and aircraft, as well as low-cost small missiles. These purchases proved beneficial, with numerous attacks intercepted recently.
Simultaneously, the U.S. government advanced weapons sales totaling approximately $23 billion to the UAE, Kuwait, and Jordan, including air defense systems, radars, and Patriot-3 missiles, though some equipment deliveries will take years. It appears that not only are U.S. energy giants reaping huge profits, but defense contractors may also benefit long-term.
Who is the long-term winner? The U.S. is a short-term victor but not necessarily a long-term one. Ultimately, the winner will be whoever maintains innovation capability, attracts talent, and ensures citizens live in secure, green environments. Although the U.S. is rich in oil and gas resources, fossil fuels cannot be the ultimate victor in the energy competition. The two oil crises of the 1970s propelled the development of fuel-efficient Japanese economies. The current geopolitical and energy crisis of the 2020s will likely accelerate the economic development of nations leading in new energy.
The data is clear. The 1973 oil crisis was followed by a second in 1979, with prices soaring from $14 to nearly $40 per barrel. Global consumers rapidly abandoned large American cars in favor of fuel-efficient Japanese models. As noted in Yuko Noguchi's "Postwar Japanese Economic History," Japan's auto production surpassed the U.S. in 1980, becoming the world's largest at 11.04 million vehicles, over 30% of global output. Market data confirms this shift. After years of adjustment, the new energy sector experienced a strong rebound in 2025, with the CSI New Energy Index rising over 50% that year. Momentum intensified in 2026, especially from April onward, with Middle East tensions acting as a catalyst. On April 13, Contemporary Amperex Technology Co., Limited (CATL) shares hit a new high, with its A-share market cap approaching 2 trillion yuan.
New energy vehicles have vast global expansion potential. Data from the China Association of Automobile Manufacturers shows that in 2025, new energy vehicle production and sales in China exceeded 16 million units, with market share climbing to 47.9%, historically surpassing 50% in December alone. A Guosen Securities report noted that China's new energy vehicle exports grew approximately 110% year-on-year in January-February 2026. High oil prices spurred robust overseas demand; Australia's pure electric vehicle sales rose 88.9% year-on-year in March, while Geely Automobile Holdings Ltd.'s overseas sales surged over 120%. New energy development also brings to mind Buffett's hedged positions between traditional and new energy sectors.
Fundamentally, a resurgence in U.S. manufacturing is unlikely solely due to increased fossil fuel exports. Are energy exporters like Saudi Arabia and Russia models for the U.S.? Overall U.S. electricity prices are already rising. On the 13th, WTI crude futures rose 9.3%, exceeding $105 per barrel. Energy needs, prices, and sources vary significantly by state; the government cannot uniformly prioritize domestic demand. Energy giants sell where efficiency and profits are highest. Regional wholesale electricity prices in the U.S. are increasing. Significant price hikes have occurred in energy-importing states, those with data center construction, and those promoting new energy.
According to the latest data from Zero Hedge, U.S. spot power prices hit a record high exceeding $1,000 per megawatt-hour at the PJM Western Hub in Pennsylvania and Maryland. The Maryland government faces continuous complaints. Surging construction of AI data centers has overwhelmed regional grids. Capital availability is insufficient; some data centers have had to be canceled. A Sightline Climate "2026 Data Center Outlook" indicated that nearly half of the planned 16 gigawatts of new U.S. data center capacity faces cancellation or delay, with only 5 GW currently under construction. Bloomberg reported that PJM Interconnection, the largest U.S. grid operator serving 13 states and over 65 million people, initiated an emergency proposal to secure an additional 15 GW of power supply, equivalent to over a dozen large nuclear or gas-fired plants coming online shortly. The gap illustrated in relevant charts highlights U.S. electricity anxiety.
The root cause is lagging U.S. development in new energy. It is hard to believe that a nation with surging energy exports faces such electrical shortages that data centers must be canceled. Ironically, the world's two major powers are trapped in a "Catch-22" absurdity: the U.S. needs to import key components from the East to lead in AI competition, while the East needs advanced chips from the U.S. to maintain competitiveness—a classic case of interdependence and conflict.
Gulf states are acting more rationally, exporting oil while pivoting toward emerging economies. The UAE, Saudi Arabia, and others have bet on new energy, AI, and green industry over the past 3-5 years, seeking higher premiums amid Sino-American competition and diversifying beyond resource supply roles. The UAE's "Energy Strategy 2050" aims for 50% clean energy by 2050. The UAE follows closely at 16.7%, with Israel, Egypt, Jordan, and Oman providing crucial support. Some nations sell oil while developing new energy. The world economy has its own paradoxical and remarkable dynamics; short-term smokescreens should not obscure the bigger picture.
Comments