Tehran could withstand blockade for four months, CIA report shows, as fighting flares
US-Iran Conflict and Economic Impact
By Idrees Ali, Erin Banco and Hatem Maher
WASHINGTON/CAIRO, May 8 (Reuters) - Efforts to end the war between the U.S. and Iran appeared to stall as the two sides traded fire in the Gulf on Friday, while a U.S. intelligence analysis concluded Tehran could withstand a naval blockade for months.
CIA Assessment on Iran's Economic Resilience
A CIA assessment indicated that Iran would not suffer severe economic pressure from a U.S. blockade of Iranian ports for about another four months, according to a U.S. official familiar with the matter, suggesting that U.S. leverage over Tehran remains limited as the two sides seek to end a conflict that has been unpopular with U.S. voters.
The Washington Post first reported the assessment.
Disputes Over CIA Claims
A senior intelligence official called the “claims” about the CIA analysis “false,” saying the blockade "is inflicting real, compounding damage - severing trade, crushing revenue, and accelerating systemic economic collapse."
Escalation in the Strait of Hormuz
Recent days have seen the biggest flare-ups in fighting in and around the Strait of Hormuz since a ceasefire began a month ago, and the United Arab Emirates came under renewed attack on Friday.
Diplomatic Efforts and Responses
Washington is awaiting Tehran's response to a U.S. proposal that would formally end the war before talks on more contentious issues, including Iran's nuclear program.
"We should know something today," U.S. Secretary of State Marco Rubio told reporters in Rome earlier in the day. "We're expecting a response from them."
Iran's foreign ministry spokesperson said Tehran was still weighing its response, and none was reported by mid-afternoon in Washington, just before midnight in Tehran.
Sporadic Clashes in Strait
SPORADIC CLASHES IN STRAIT
Meanwhile, more sporadic clashes between Iranian forces and U.S. vessels took place in the Strait of Hormuz, Iran's semi-official Fars news agency reported. The Tasnim news agency later cited an Iranian military source saying the situation had calmed, but warning more clashes were possible.
The U.S. military said it struck two Iran-linked vessels attempting to enter an Iranian port, with a U.S. fighter jet hitting their smokestacks and forcing them to turn back.
Iran has largely blocked non-Iranian shipping through the strait since the war began with joint U.S.-Israeli airstrikes across Iran on February 28. The U.S. imposed a blockade on Iranian vessels last month.
Oil prices rose, with Brent crude futures above $101 a barrel, though still down more than 6% for the week. [O/R]
Trump said on Thursday the ceasefire was still holding despite the flare-ups in the strait, which before the war handled one-fifth of the world's oil supply.
The confrontation extended beyond the waterway. The United Arab Emirates said its air defenses engaged with two ballistic missiles and three drones from Iran on Friday, with three people sustaining moderate injuries.
During the war, Iran has repeatedly targeted the UAE and other Gulf states that host U.S. military bases. In what the UAE called a "major escalation", Iran stepped up attacks this week in response to Trump's announcement of "Project Freedom" to escort ships in the strait, which he paused after 48 hours.
Iran Accuses U.S. of Breaching Truce
IRAN ACCUSES U.S. OF BREACHING TRUCE
Iran accused the U.S. of breaching the ceasefire, which had largely held since it was announced on April 7 but has come under strain this week.
"Every time a diplomatic solution is on the table, the U.S. opts for a reckless military adventure," Foreign Minister Abbas Araqchi said on Friday. Iran's Mehr news agency reported that one crew member was killed, 10 wounded and four missing after a U.S. Navy attack on an Iranian commercial ship late on Thursday.
Rubio, after meeting with Italian Prime Minister Giorgia Meloni, questioned why Italy and other allies were not backing Washington's efforts to re-open the strait.
"Are you going to normalize a country claiming to control an international waterway? Because if you normalize that, you've set a precedent that's going to get repeated in a dozen other places," he said.
U.S. Imposes Sanctions
U.S. IMPOSES SANCTIONS
While pursuing diplomacy the U.S. also ratcheted up sanctions to pressure Iran.
New Sanctions Announced
The U.S. Treasury on Friday announced sanctions against 10 individuals and companies, including several in China and Hong Kong, for aiding efforts by Iran's military to secure weapons and raw materials used to build Tehran's Shahed drones.
Treasury said in a statement it remains ready to take economic action against Iran's military industrial base so Tehran cannot reconstitute its production capacity and project power abroad.
It also said it was prepared to act against any foreign company supporting illicit Iranian commerce and could impose secondary sanctions on foreign financial institutions including those connected to China's independent "teapot" oil refineries.
The announcement came days before Trump plans to travel to China for a meeting with President Xi Jinping.
(Reporting by Reuters bureaus; Writing by Andrea Shalal, Lincoln Feast, Ros Russell and Alex Richardson; Editing by Andy Sullivan, Alexandra Hudson, Peter Graff, Mark Potter and Cynthia Osterman)
