Trump Threatens Trade War with Spain Amidst Iran Tensions and Energy Crisis

Washington D.C. – US President Donald Trump has escalated tensions with Spain, threatening to cut off all trade with the country after Madrid refused to allow the apply of its military bases for potential strikes against Iran. This move comes as global oil and gas prices surge due to disruptions in the Strait of Hormuz, a critical waterway for energy transport, and as the US seeks to bolster security in the Middle East.

Spain Rejects US Request, Cites International Law

The dispute began after the United States and Israel attacked Iran on Saturday, prompting condemnation from Spanish Prime Minister Pedro Sanchez, who deemed the attacks a breach of international law. Sanchez emphasized the need for dialogue to de-escalate the conflict. Spain subsequently refused a US request to utilize its military bases – jointly operated with the US but under Spanish sovereignty – for operations targeting Iran. Spanish Foreign Minister Jose Manuel Albares affirmed Madrid’s position, stating that the US must comply with international law and existing EU-US trade agreements Al Jazeera.

Trump’s Response: A Threat to Trade Relations

In response, Trump threatened a complete trade embargo against Spain, stating, “Some countries have been helpful, some have not.” The Spanish government responded by asserting its ability to mitigate the impact of a US trade embargo and reiterated the importance of adhering to international law and bilateral trade agreements with the European Union Al Jazeera.

Strait of Hormuz Crisis and US Navy Intervention

The escalating tensions coincide with a significant disruption to energy flows through the Strait of Hormuz. Approximately a fifth of the world’s oil and gas passes through this narrow waterway between Iran and the United Arab Emirates, but traffic has almost entirely halted following Iranian threats to “set fire” to ships BBC News. Iran has reportedly fired on several vessels in the area, leading insurance companies to dramatically increase policy prices for ships navigating the region. Roughly 200 crude oil and product tankers are currently stranded in the Gulf BBC News.

To counter this, Trump announced that the US Navy will protect ships in the Middle East “if necessary” and will provide risk insurance “at a incredibly reasonable price” to all shipping firms in the region to “ensure the FREE FLOW of ENERGY to the WORLD” BBC News. He also pledged military escort “as soon as possible” and directed the United States Development Finance Corporation (DFC) to provide political risk insurance and guarantees for maritime trade, particularly energy shipments BBC News.

Global Energy Markets React

The disruptions in the Strait of Hormuz have sent shockwaves through global energy markets. Brent crude oil settled at $81.40 a barrel, its highest level since January 2025, although European gas prices surged as much as 40% The Guardian. Rising prices for sugar, fertilizer, and soy have added to concerns about potential inflationary pressures and a slowdown in economic recovery in Europe and Asia The Guardian.

Looking Ahead

The situation remains highly volatile. Trump is scheduled to meet with Energy Secretary Chris Wright and Treasury Secretary Scott Bessent to discuss further strategies to address the energy crisis. The outcome of these discussions, and Spain’s response to the trade threat, will be crucial in determining the short-term trajectory of both the geopolitical and economic fallout from the escalating conflict in the Middle East.