“We are jujitsuing the Iranians,” Treasury Secretary Scott Bessent said on Sunday. The United States had just lifted sanctions on about 140 million barrels of Iranian oil, which will likely deliver billions of dollars to a regime the United States is currently at war with. In Mr. Bessent’s telling, America is using Iran’s own oil against it. Iran wants to drive oil prices high enough for President Trump to have to back down. By offering sanctions relief, Mr. Bessent argues, America can flood the market and lower prices.
If either side in this war has pulled off an act of jujitsu, it is Iran. For the first time since 1995, Tehran can sell oil directly to the United States and use the American financial system to collect payment. By closing the Strait of Hormuz for a few weeks, it has secured sanctions relief that in some respects surpasses what it achieved via the 2015 nuclear deal. The United States has long weaponized the financial system to advance its geopolitical aims. Iran has now learned to do the same with the world’s most vital energy chokepoint. And it has done so by borrowing a playbook developed by the United States.
Shortly after winning re-election in 2004, President George W. Bush lamented his lack of leverage. “We’ve sanctioned ourselves out of influence with Iran,” he said. After a decade-long embargo, the United States had virtually no trade or investment ties left with the country. With little left to sanction, Washington saw only one way to increase pressure: Persuade allies to join. Many did not view Iran as a pressing threat. U.S. credibility was strained by the Iraq war. Few of our partners wanted to risk another messy entanglement.
At a hotel breakfast in Bahrain, Stuart Levey, Mr. Bush’s under secretary of the Treasury, was flipping through a newspaper when he came across a story about a Swiss bank that had cut ties with Iran of its own accord. “It sort of clicked for me,” he later recalled. The United States didn’t need to persuade foreign governments to shun Iran. It could instead compel foreign banks to do so — from London to Frankfurt to Dubai to Hong Kong.
Over the following years, Mr. Levey and his successors did just that. By threatening to cut off foreign banks from the dollar unless they severed ties with Iran, they effectively isolated the country from the international financial system. The United States rarely had to follow through on its threats. In a strategy one U.S. official described as “killing the chicken to scare the monkeys,” Washington deployed these so-called secondary sanctions sparingly. On the few occasions they were applied, everyone else got the message. Sanctioning a single Chinese bank was enough to shift the risk tolerance of the rest.
In recent weeks, Iran has turned this strategy against the United States. Analysts long assumed that closing the Strait of Hormuz would require Iran to lay thousands of sea mines and render the strait physically impassable. That made such a move unlikely, since Iran depends on the same waterway to export its own oil.
Instead, Iran has shown it can disrupt the strait at far lower cost. By striking a small number of ships with relatively cheap drones and missiles, Tehran has been able to reshape the risk calculus of the entire global shipping industry. Iran does not need to target every ship, just as the United States did not need to sanction every bank. A few examples were enough to force the rest to fall in line.
Despite Mr. Trump’s best efforts — which have included offering government-backed insurance and encouraging mariners to “show some guts” — traffic has fallen by around 90 percent since the start of the war. The few ships still transiting the waterway are mostly Iranian. In effect, Tehran has established itself as gatekeeper of the strait, demanding multimillion-dollar tolls to guarantee safe passage.
While the Trump administration’s war aims have vacillated between regime change, denuclearization and military degradation, it now has one overriding objective: reopening the strait. Another lesson from the U.S. sanctions campaign could shape what happens next. After the 2015 Iran nuclear deal, global banks were allowed to do business with Iran once more. Mr. Levey, by then the chief legal officer of the London-based HSBC, concluded that the risk for the bank was too high. The Iranian regime had not fundamentally changed, and the United States could ratchet up sanctions again.
It is much easier to heighten risk perception than to reduce it. Iran’s drones are cheap and plentiful. Conflict could reignite. Even after this phase of the war ends, fear that Iran can disrupt the strait at will may linger — deterring investment, reducing traffic and embedding a lasting price increase in global energy markets.
Iran has learned the lessons of American foreign policy. It has used the tools at its disposal to exacerbate risk, forcing private actors to become unwitting tools of its statecraft. That strategy appears vindicated: It has delivered sanctions relief that years of diplomacy could not. Tehran may now conclude that further pressure is the best way to extract more concessions.
What happens if other countries reach the same conclusion? If the world deals with the United States by fighting back, rather than negotiating, stability will be harder to achieve — and more costly once won.
Edward Fishman is a senior fellow and the director of the Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations. He is the author of “Chokepoints: American Power in the Age of Economic Warfare.”
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