Iran Announces Fuel Rationing As Brent Sets New War Highs, After Trump Rejects Tehran's Latest Offer

Summary

• Brent crude reaches $120/barrel - new Iran war high, and highest since June 2022. Simultanously, Iran's currency has collapsed to a record low, plunging to 1.8 million rial per dollar - also amid mass layoffs in various Iranian sectors.

• CENTCOM reportedly preparing for "short wave of strikes" on Iran in order to potentially break the Hormuz impasse & force Tehran back to the negotiating table. Trump rejects Iran proposal as it won't give up nuclear program.

• Trump recently met this week with oil and gas executives at the White House to address energy fallout, and as oil pushes higher: Axios.

• Trump warns Iran to "get their act together" and to "get smart" - and for the second time writes "no more Mr. Nice Guy".

• Fresh White House statement indicates communication still open with Tehran, but still says "Iran can never possess a nuclear weapon."

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Iran Currency Plunges To Record Low

Iran's currency has collapsed to a record low, plunging to 1.8 million rial per dollar amid the prolonged US-Israel war and uneasy ceasefire, also as surging global energy prices hit the economy.

The rial began sliding sharply two days ago after weeks of artificial stability. In the early phase of the war that kicked off on February 28, the currency held steady due to a near-total halt in imports and limited market activity.

The renewed freefall reflects runaway inflation driven by sanctions but also economic mismanagement, intensifying pressure on households also amid mass layoffs especially in Iranian industries like textiles. In some cases whole major steel factories have been obliterated, for example. Currently, the US is maintaining three aircraft carriers in the region and is sending additional troops and equipment, while Israel signals readiness to resume fighting. The Israelis have a stated goal of government overthrow or else total societal collapse. WSJ meanwhile writes:

To contain the economic fallout, the Iranian government has raised wages, subsidized basic goods and handed out cash to the poor. But authorities are confronting a level of hardship not seen in decades, according to residents.

“It is an authoritarian regime, and it can claim that resisting economic pressure is a question of national pride,” said Alex Vatanka, a senior fellow and Iran expert at the Middle East Institute. At the same time, “as the money dries up because of the blockade, we may find that more and more folks have no choice but to mobilize politically,” he said.

Such suffering is being intentionally engineered by Washington, as Bessent and others have previously boasted.

Brent War Highs, Iran Announces Fuel Rationing

Brent crude oil prices have briefly reached their highest level of the Iran War, at $119.50/barrel $120, which is also the highest since 2022. Iran is meanwhile starting to ration fuel, according to state sources, with the country's oil minister newly announcing the following:

IRAN OIL MINISTER: JUSTIFIES RATIONING FUEL CONSUMPTION BY "WAR CONDITIONS"

IRAN OIL MINISTER: NO INTERNAL CONCERNS REGARDING THE SECURING AND DISTRIBUTION OF FUEL

Brent crude oil futures rose above $110 soon after Trump's earlier morning threat and warning to Iran.

West Texas Intermediate futures also trading well above $100 a barrel.

Trump Rejects Iran Offer, Prepares 'Short Wave' Strikes

When in doubt, escalate higher? US Central Command is reportedly preparing for a "short wave of strikes" on Iran in order to potentially break the Hormuz impasse and force Tehran back to the negotiating table, where the US wants it to hand over its enriched uranium and finally abandon its nuclear program. We're in the "just one more thing will do it" in the escalation ladder, which was all easily predictable.

"Trump told Axios the U.S. will maintain a naval blockade on Iran until a nuclear deal is reached, rejecting Tehran’s plan to ease restrictions before talks," per Barak Ravid. "He said the blockade is more effective than bombing and will continue as key leverage, insisting Iran must not obtain a nuclear weapon."

So there are more plans at least 'on the table' for possible 'limited strikes' as diplomacy has clearly been faltering; however, Iran is saying it is prepared to fight back hard in the scenario that the US naval blockade of Iranian ports continues. Meanwhile this is doing nothing to help soaring oil prices, and prices at the pump for Americans and people globally. Congress is getting nervous, and they should be after rejecting several War Powers initiatives. Brent inches toward hitting Iran war highs:

And more: Trump told Axios he saw the blockade as "somewhat more effective than the bombing," and the sources said he had yet to order any kinetic action as of Tuesday night.

Unnamed GOP Senator tells Semafor as Iran War set to hit 60-days on Friday: "People cross some sort of threshold and start to be very uncomfortable with it. I am sensing restlessness among many of my colleagues."

Trump Huddles with Oil Execs: Axios

President Trump recently met this week with oil and gas executives at the White House to address the energy fallout from the Iran war, per fresh Axios reporting, as supply disruptions push prices higher and create both opportunity and risk for the industry. Among those attending were Mike Wirth of Chevron, along with senior officials including Susie Wiles, Scott Bessent, Steve Witkoff, and Jared Kushner.

A White House official said, "The president meets with energy executives frequently to get their feedback on domestic and international energy markets," with discussions covering domestic production, Venezuela, oil futures, natural gas, and shipping. It should be noted that while Trump "huddles" with oil CEOs, Republicans in Congress are still too scared to so much as pass a simple War Powers Resolution, or to have real robust debate over the merits of the Iran War.

The Middle East supply shock is obviously driving up global crude and US gasoline prices, which sets up for huge implications for Republicans come next fall's midterms. Oil prices have extended their multi-day rally, surpassing $116 a barrel:

Brent crude futures for June rose $4.24, or 3.81%, to $115.50 a barrel by 1255 GMT, climbing for an eighth day to the highest level since March 31. The June contract expires on Thursday and the more active July contract was up 3.86% at $108.43.

Oil Pushing Toward Iran War Highs

Earlier in the morning, Brent crude oil has neared $115 per barrel, driven by the ongoing Hormuz Strait blockade and standoff, and war fears - in a seventh straight session of gains.

This latest move higher follows Tuesday night's WSJ report that the US plans to extend its blockade of Iranian ports, intensifying fears of prolonged disruption through the strategically critical Strait of Hormuz. 

As a reminder, the president has told aides and his staff that he's prepared to implement an extended blockade:

President Trump has instructed aides to prepare for an extended blockade of Iran, U.S. officials said, targeting the regime’s coffers in a high-risk bid to compel a nuclear capitulation Tehran has long refused.

In recent meetings, including a Monday discussion in the Situation Room, Trump opted to continue squeezing Iran’s economy and oil exports by preventing shipping to and from its ports. He assessed that his other options—resume bombing or walk away from the conflict—carried more risk than maintaining the blockade, officials said.

4am Truth Social

This isn't exactly a 'new' threat, as it's something he said on April 19 as well, but President Trump in a 4am Truth Social post warned Iran to "get smart soon" as the White House reviews military options for the Strait of Hormuz.

"Iran can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!" Trump wrote early Wednesday, alongside an image showing him with a weapon and the message "NO MORE MR. NICE GUY!"

Members of Trump's national security team presented multiple options during a Situation Room meeting this week, including whether to increase or reduce the US military presence in the strait and whether to adopt a more aggressive operational posture, NBC News reported, citing an unnamed US official and a person familiar with the discussions. According to the WSJ Tuesday evening, the president has told aides and his staff that he's prepared to implement an extended blockade.

WH still Communicating With Tehran

And yet, the White House says negotiators are still in communication with the Iranians, who are "struggling to sort out their leadership situation" amid the war. Trump on Tuesday claimed Tehran officials told him the country is in a "State of Collapse" - though obviously it's highly dubious they would communicate that to him.

White House spokesperson Anna Kelly told media that Trump would only enter into an agreement with Iran that "puts US national security first" and that "He has been clear that Iran can never possess a nuclear weapon." However, the Iranians themselves have made it clear they would never just transfer their enriched uranium out of the country. Their latest proposal has centered on lifting the blockade on the Strait of Hormuz first, and then leaving the nuclear issues for future negotiation after the war is resolved.

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