Welcome back to the MBN Iran Briefing.
Iran’s governing council faces simultaneous pressure on two fronts this week: a diplomatic standoff over competing peace proposals exchanged through Pakistani intermediaries, and a sharp naval escalation in the Strait of Hormuz. U.S. forces launched Project Freedom, a military operation to escort roughly 2,000 commercial vessels stranded in the waterway since Iran imposed its blockade in February, and Iran threatened to attack American ships entering the strait.
Find out more below.
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Quote of the Week
“The situation in Iran is not like anything before. It’s an emergency. And we know that the lives of a lot of people are in danger. We see executions that are carried out every day.… The world should wake up.”
—Hamidreza Mohammadi, brother of imprisoned Iranian Nobel Peace Prize laureate Narges Mohammadi, who is in critical condition in a cardiac care unit in Zanjan
TOP OF THE NEWS
Iran has lived under successive waves of Western sanctions for more than four decades, but the naval blockade imposed by the United States on Apr. 13 represents something different from anything that came before. Previous sanctions regimes targeted financial networks, arms transfers, and oil revenues. These squeezed Iran’s economy while leaving its physical trade routes intact. The blockade, however, represents a significant departure from those policies; it prohibits any vessel from entering or departing Iranian ports and intercepting ships that attempt to run it. By the Pentagon’s own estimate, 31 tankers carrying 53 million barrels of Iranian crude are stranded in the Gulf, representing at least $4.8 billion in lost oil revenue in the blockade’s first three weeks alone. As I reported last Thursday, Iran’s storage capacity is filling to the point where engineers may soon be forced to shut down producing wells. The immediate effect has been to force Iran back onto the workarounds it has spent decades constructing, including land corridors, Caspian Sea routes, deception via shadow fleets of untracked tankers, and oil-laundering networks embedded inside neighboring economies.
These channels were never incidental to Iran’s economic survival. They were built precisely for a moment like this, and have been hardened through years of maximum pressure campaigns and updated after each new round of U.S. sanctions. Whether the blockade can close them fast enough to force a diplomatic settlement is a central question.
A driver closes the hood of his parked truck in Pakistan. Photo: Reuters
Pakistan. As the blockade tightened and attention turned to Iran’s overland options, I asked my MBN colleague Abubakar Siddique, a South Asia expert, to explain the most-discussed of them: the Pakistan land corridor. Here’s what he told me:
Pakistan’s new land bridge with Iran has been touted as a potential breakthrough for Tehran, currently struggling under a U.S. naval blockade.
Under Islamabad’s new trade policy, three southern Pakistani ports will serve as crucial transit hubs for Iran. Six land routes in the vast Balochistan region, which spans southwestern Pakistan and southeastern Iran, will connect Pakistani seaports with Iran’s mainland.
A closer examination of Balochistan, however, will illustrate that transforming it into a major trade and transport hub won’t be easy. For over two decades, Pakistan’s southwestern Balochistan Province and the southeastern Iranian province of Sistan-Balochistan have reeled from separatist and Islamist violence. Both provinces are the poorest in their respective countries. Their vast mineral wealth has not translated into development and emancipation for their ethnic Baloch residents, who live as marginalized minorities in the two countries.
Earlier this year, separatists in Balochistan carried out their largest-ever coordinated attacks against the Pakistani government. Hundreds were killed in fighting that spread over several days in some parts of the province. In recent years, the Baloch Liberation Army (BLA), declared a terrorist group by Washington and outlawed in Pakistan, has particularly targeted transport networks in the province. Last year, the group even hijacked a passenger train.
The rising insecurity in Balochistan has forced the Canadian mining giant Barrick Gold Corporation to reconsider and slow down its investment in developing a major gold and copper mining project in the province. Even Chinese firms are threatening to leave Balochistan due to an unfavorable business environment.
As Pakistan’s most underdeveloped region, Balochistan’s infrastructure is poorly equipped to handle a sudden increase in cross-border trade. Most of the region’s main transport arteries are two-way roads where traffic accidents occur frequently.
Currently, most of the bilateral trade between Pakistan and Iran consists of smuggling, primarily of inexpensive Iranian fuel. Given this context, embarking on a major commercial venture appears unlikely, especially while Tehran struggles for its very survival in the aftermath of its war with the U.S. and Israel. Earlier this year, Islamabad was considering abandoning a major gas pipeline project with Tehran, which was first conceived in the 1990s.
Lastly, Pakistan’s trade corridor with Iran may also send a message to its western neighbor, Afghanistan. Islamabad is keen to convey to Kabul that it can find alternative routes to reach Central Asia, as its border with Afghanistan has been completely shut since October.
Khor Al Zubair Port near Basra, Iraq. Photo: Reuters
Iraq. Before the blockade, the most durable overland evasion channel for Iranian crude was not Pakistan. It was Iraq, and specifically the network of Iran-aligned militias that have for years controlled a sophisticated oil-blending operation running through the southern port of Khor al-Zubayr, in which Iranian crude is mixed with Iraqi oil to disguise its origin.
Iranian crude is transported to Iraqi storage facilities, where it is mixed with Iraqi oil and sold internationally as a purely Iraqi product. The scheme generates more than one billion dollars annually for Iran and its partners. Baghdad has proved consistently unwilling to shut it down, as Iraq’s political class has depended on the Iran-backed Shiite militia groups that run it. The U.S. Treasury sanctioned the network in September 2025, naming a businessman operating through two UAE-based companies as the principal operator, with one handling logistics and shipping and the other marketing the blended product on international exchanges. A fleet of Liberia-flagged vessels conducted ship-to-ship transfers in the Arabian Gulf and at Iraqi ports before the product reached international markets.
The blockade has not killed this channel. It has, rather, pushed it further underground, and added a new tactic on top of it, known as AIS spoofing.
An oil tanker moored at one of Iraq’s southern offshore oil terminals near Basra. Photo: Reuters
AIS Spoofing. A cluster of sanctioned tankers have been manipulating their Automatic Identification System signals to create the appearance of anchored positions off Basra and Khor al-Zubayr, while in reality loading Iranian crude at Iranian ports. Four of the vessels are very large crude carriers (VLCCs) sailing under fraudulent registries from Curaçao, Malawi, Guyana, and other small jurisdictions. Each holds roughly two million barrels. The four VLCCs together represent an estimated $800 million in cargo.
Two further tankers are transmitting false “Iraqi owner” signals already known to the U.S. Treasury Department. Vessels transmit false destination messages to Iraqi ports, disappear from tracking while loading sanctioned oil in Iran, then re-emerge on AIS with voyage histories that suggest compliant Iraqi trade.
The Caspian Lifeline. The route least visible to Western enforcement is the one furthest from it: the International North-South Transport Corridor linking Iran’s northern ports to Russia and Kazakhstan across the Caspian Sea. Goods move from Russian ports at Astrakhan south to Bandar Anzali and Chalus on Iran’s Caspian coast, then onward by rail and truck into the Iranian interior. The route has carried grain, machinery, and sanctioned oil between two states sanctioned by the West since Russia’s full-scale invasion of Ukraine in 2022, and serves as the principal conduit for Iranian Shahed drone transfers to Russia in the reverse direction.
The Caspian is effectively a “closed environment where monitoring is both impractical and currently of lower priority for global enforcement,” in the words of sanctions expert Benjamin Hilgenstock. Israel struck Bandar Anzali’s naval installations in March, temporarily halting grain shipments and damaging military infrastructure. Despite the disruption, Iran maintained Caspian access to Russia and Kazakhstan.
Michael Rubin of the American Enterprise Institute has argued that Washington should mine waters off Bandar Anzali to close the Caspian loophole.
Who Profits? The IRGC controls the majority of Iran’s pre-existing smuggling infrastructure. A Persian Gulf maritime squeeze does not weaken the Revolutionary Guard in the short term. Instead it makes the IRGC the indispensable logistics arm of a besieged economy, positioned to profit from every workaround it controls. While the blockade does exert pressure on Iran’s treasury, it has far less effect on the IRGC.
People walk past a display at a currency exchange bureau in Tehran on Saturday, as the value of the Iranian rial drops. Photo: Reuters
ESSENTIAL READING: IRAN SANCTIONS
Iran War Maritime Intelligence Daily – Windward AI, April 2026. The primary source on AIS spoofing.
“The Strait of Hormuz Is a Data Problem, Not Just a Military One” – Fortune, April 2026. Op-ed by Windward CEO Ami Daniel and former World Bank executive Erik Bethel. On April 21, only 74 of 296 vessels off Bandar Abbas were transmitting accurate AIS signals.
“The Economic Game of Chicken Between Iran and the US Is About to Enter a Dangerous New Phase” – CNN Business, April 2026. Assesses whether the blockade can actually close Iran’s evasion channels, including the Iraq oil-blending and Pakistan land routes, fast enough to force a diplomatic settlement.
U.S.-Iran Ceasefire and Nuclear Talks in 2026 – House of Commons Library, April 2026. UK parliament non-partisan reference briefing covering the two rounds of U.S.-Iran talks, the sticking points, and why the Islamabad talks stalled.
Andres Ilves
Andres Ilves is Iran Editor and Senior Adviser at MBN. His career as a journalist and writer includes two decades at the BBC and Radio Free Europe.
