Donald Trump, standing before a rapturous crowd in the South Carolina beach town of Myrtle Beach on Friday night, made a statement that no U.S. president has ever made: He declared the Strait of Hormuz "American territory," and threatened Tehran with never being allowed to develop a nuclear weapon. The president called the strait "American territory" in escalating tensions between Washington and Tehran, when he spoke to supporters in South Carolina. Just two days before a competitive Republican Senate runoff, the comment had a broader impact, going far beyond just the Carolinas race.

There was no legal basis for the president's claim, and no basis. The Strait of Hormuz is an international shipping route sandwiched between Iranian and Omani waters and is under a longstanding maritime law which has never been challenged by any American administration with a territorial claim. But he said the waterway had been under the control of Washington, and questioned whether the United States would accept an agreement Iran was pressing for, and even expressed the view that the United States should formally declare the strait its territory before he went to the rally earlier in the day, speaking with reporters at Joint Base Andrews. In recent weeks, Iran's foreign ministry has repeatedly called for the removal of Washington's naval blockade of Iran before it will reopen Hormuz for unrestricted shipping.

All this talk comes with no vacuum. It comes at a time when crude markets are again in flash-red. Brent crude was near $94 a barrel for a second consecutive weekly increase of about six percent on Friday, its highest price since July, as West Texas Intermediate was around $86. That's a period of continuous improvements with the expectation that Washington is getting ready to crank up the pressure. Treasury Secretary Scott Bessent stated on Monday that more information on a new package designed to “ring-fence” Iran's economy would be revealed that same day, the day that Trump has dubbed an “economic D-Day.” The steps are likely to target the financial and shipping channels used by Tehran to keep selling crude oil despite months of sanctions and could catch countries that persist in buying Iranian crude, notably China, which has already defied the pressure campaign by proposing a negotiated solution.

The blockade itself is not new but the cost is increasing on both sides of the ledger to ignore. The Energy Information Administration has cited the potential disruption of about 600,000 barrels a day due to the conflict and the International Energy Agency has multiple times lowered its global estimates due to the closure of normal traffic through the Hormuz and the separate disruption of the Bab el-Mandeb port. OPEC has cut its demand growth estimates in all four of the past months, and is indicating that the pull war is starting to affect global demand in addition to supply. Since May, Washington has claimed, its own navy has escorted over 660 million barrels of crude oil through the strait, making it more than just a rhetorical flourish to suggest it is being placed under American military control.

It's not just an international price for this posture, however, there is an internal cost as well that Trump touched on at the rally when he said the Iran situation was a "detour" from his economic plan. The U.S. Strategic Petroleum Reserve (SPR) has reached its lowest point since January 1983, just a month after the war started, after multiple reductions aimed at countering the price surge created by the war. Prophecy is now in the air, with Americans yet again facing rising pump prices and it not remaining in the U.S. borders. Since the conflict flared up, gasoline prices have climbed in over a hundred countries, including some of the largest increases in Asia, a reminder that a dispute over a seventy-kilometre long waterway off the Iranian coast can have a significant impact on household budgets from Manila to Munich.

In a political sense, the president's narrative hasn't been unchallenged even in Washington. Instead, democratic members of Congress have pointed out that the administration's strategy has given Tehran a new tool with which to play: control over global energy supplies now surely plays a greater role in the success of Iran's regime than its nuclear ambitions ever did, and it is the one card that can cause markets to tremble while it paces the resolve of Americans. That is a rebuttal to the thesis that Trump is selling to voters, who see the blockade as a squeeze on an Iranian economy in free-fall due to inflation and cash shortages, and in which the best they can hope for is to be patient.

It's certain that both sides have hit a dead end. Iran says the blockade should be removed before it will guarantee open passage; Washington says guarantees should be provided to remove the blockade. Now, Trump has thrown in an unwarranted territorial claim at an inopportune moment, coming at the tail end of a domestic campaign stop, when everyone from oil traders to foreign ministers to average motorists is watching the same slim highway for signs of where it's heading next.