White House senior adviser for trade and manufacturing Peter Navarro disclosed Tuesday that President Donald Trump’s focus on the Strait of Hormuz underscores the critical economic stakes of safeguarding a vital oil shipping lane from Iranian threats.
During an interview with “Rob Schmitt Tonight,” Navarro stated that Iranian activities in the narrow waterway have long imposed what he termed a “terror premium” on global oil prices, resulting in billions of dollars of added costs for the world economy.
“I want to explain the Iran terror premium,” Navarro said.
When President Trump warned Iran Monday against mining the Strait of Hormuz—a critical shipping channel through which approximately one-fifth of the world’s oil supply passes—U.S. Central Command reported on Tuesday that the U.S. Navy sank 16 Iranian mine-laying vessels in the strait.
Navarro argued that Iran’s geopolitical conduct over decades has artificially inflated global energy prices.
“For over 45 years, because of the geopolitical risk associated with Iran’s terror, with its terror through proxies like Hamas, Hezbollah, and the Houthis, what that has done—and there are well-documented studies on this—is effectively raise the price of a barrel of oil $5 to $15 above what otherwise market conditions would dictate,” Navarro stated.
He added: “Its cost over these 45 years [is] something like $10 trillion of slower GDP growth.”
Navarro emphasized that eliminating the Iran terror premium is essential for global economic stability.
“We’re in a world where we also trade with other countries, particularly in Asia, and Asia will bear a heavy brunt of this,” he said.
Navarro stressed that stabilizing oil markets by removing the Iran risk factor would bolster global growth.
“Remember, it’s $10 trillion they’ve already extracted from the global economy in terms of gross domestic product drag—that’s got to stop,” Navarro concluded.
