Trump reviews Iran peace proposal as Hormuz blockade throttles oil exports and spikes gas prices

Two months into a conflict between the United States, Israel, and Iran, the war shows few signs of reaching resolution as economic pressures mount on Tehran while American consumers face rising energy costs. President Donald Trump said Saturday that he is reviewing a new peace proposal from Iran but warned that the country has not yet "paid a big enough price" for its actions, leaving open the possibility of renewed military strikes if Tehran "misbehaves." The ongoing dispute centers significantly on control of the Strait of Hormuz, a critical chokepoint through which roughly 20 percent of the world's oil and gas supplies flow.

The U.S. naval blockade in the Strait of Hormuz has severely constrained Iran's ability to export oil, with Iranian oil exports plunging in recent weeks as storage facilities rapidly fill to capacity. According to a senior Iranian official, the country has already begun curbing production in response to the blockade, creating a precarious situation where Iran must choose between cutting output or managing overflowing storage tanks. The economic squeeze reflects what some analysts describe as the limits of American economic coercion, as the conflict stretches into its third month without clear resolution despite its toll on Iran's vital energy sector.

The blockade has also disrupted global energy supplies and contributed to soaring oil prices worldwide. American oil majors including Exxon Mobil and Chevron posted stronger-than-expected first-quarter earnings as higher oil and natural gas prices compensated for production disruptions caused by the Iran conflict. However, these gains have translated into pain for ordinary Americans, with nearly half of U.S. households reporting they are cutting daily expenses and altering travel plans to cope with spiking gasoline prices stemming from the war. The energy crisis has extended beyond the United States, with India facing acute fuel shortages as tankers struggle to navigate the contested waterway, though at least one India-linked vessel carrying liquefied petroleum gas recently managed to transit the Strait of Hormuz.

The geopolitical ripple effects include shifts in regional alliances, with the United Arab Emirates departing OPEC as Iran feels the economic sting of the blockade. Trump's warning that renewed strikes remain possible if Iran steps out of line suggests the administration views military action as a tool available should diplomatic efforts falter. A senior Iranian official indicated that Tehran's latest proposal would reopen shipping in the Strait of Hormuz and end the U.S. blockade while deferring negotiations on Iran's nuclear program to a later stage, though Trump's skepticism about whether such proposals could be acceptable signals significant daylight remains between the parties on a path forward.