The US-Israeli bombing campaign has destroyed large parts of Iran’s infrastructure and industries, causing disruptions to domestic production and driving up prices of essential food goods.

The US naval blockade has also increased economic pressure on Tehran after disrupting its trade through the Strait of Hormuz, one of the world’s most important maritime corridors, which has effectively been closed since the outbreak of the war on February 28.

In response, Iran has turned to alternative routes by transporting goods via trucks from neighboring Pakistan and Turkey, alongside shipping goods from Russia, its ally, through the Caspian Sea. Tehran is also studying the possibility of transporting oil by rail to China, one of its most important trading partners.

Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore, said that alternative routes can supply the Iranian economy with consumer goods, food, and industrial materials, but “cannot fully replace the maritime container economy.”

Hanke, who previously served as an economic adviser to former US President Ronald Reagan’s administration, added: “Truck transportation is more expensive, and the capacity of ports and fleets in the Caspian Sea is limited. Therefore, import costs are expected to rise and inflation in tradable goods will increase, but not the economic collapse some have spoken about.”

US President Donald Trump had stated in late April that “Iran’s entire oil infrastructure will explode,” arguing that the US blockade prevents Tehran from exporting oil, the main lifeline of its economy. However, experts question whether closing the Strait of Hormuz can force Iran to surrender or accept a peace agreement under US terms.

Iranian authorities, for their part, confirmed that the US blockade has not affected the country’s ability to provide essential goods and food, pointing to strong domestic production and the existence of alternative import routes.

Iranian Agriculture Minister Gholamreza Nouri said on April 21:

“Despite the US naval blockade, we face no problem in providing essential goods and food, because the size of the country allows imports through various borders.”

Rosemary Kelanic, director of the Middle East Program at the Washington-based Defense Priorities think tank, believes Iran’s geography has reduced the impact of the US naval blockade.

Iran, with a population of about 90 million, has land borders stretching nearly 6,000 kilometers with seven countries, in addition to a 700-kilometer coastline on the Caspian Sea linking it to Central Asia and Russia.

Kelanic said: “Measures such as trucking goods from neighboring countries can compensate for disruptions caused by the blockade, even if the compensation is not complete. Trade volumes may be lower, transportation costs higher, and the type of goods may change, but a wartime economy is capable of finding alternatives.”

She added: “The possibilities for Iranians to bypass Trump’s blockade are endless, because the country possesses thousands of kilometers of land borders.”

Under international law, no blockade is permitted to prevent the flow of food and medicine. It remains unclear whether the United States is obstructing shipments of civilian goods to Iran intentionally or indirectly.

Alternative land routes

Iranian MP Ebrahim Najafi said last month that the country is using land routes through Pakistan, Turkey, Armenia, and Azerbaijan, in addition to the Caspian Sea, to import goods.

On April 25, Pakistan opened its ports to shipments arriving from third countries and heading to Iran, allowing the establishment of six land routes to transport goods from Gwadar, Karachi, and Port Qasim to the Iranian border. These routes are expected to be used mainly for importing rice, meat, and infant formula.

Since the US blockade was imposed on April 13, about 3,000 containers bound for Iran have been stranded at Pakistani ports.

The Kapikoy-Razi crossing also links Iran with Turkey and forms part of a major trade corridor connecting West Asia with Europe. It remains unclear whether Tehran has increased imports through this corridor since the blockade began.

Meanwhile, Russia resumed shipments through the Caspian Sea to Iran’s Bandar Anzali port, located on the world’s largest enclosed body of water.

Israel had targeted Bandar Anzali in airstrikes on March 18, causing damage to the port. Tel Aviv stated at the time that it struck Iranian naval targets and facilities housing dozens of military vessels, including missile boats and patrol ships.

Media reports indicate that Moscow and Tehran use the Caspian Sea to smuggle sanctioned oil and weapons, although the two countries also exchange food commodities through this route. Grain trade between Russia and Iran stopped immediately after the Israeli attack before later resuming.

Kpler, the commodities and shipping analytics company, said that about 12 ships from Russia, Kazakhstan, and Turkmenistan loaded with grain, corn, and sunflower oil have arrived at Iranian ports on the Caspian Sea since mid-April.

Oil via railways

In addition to securing new import routes, Iran is also searching for alternative methods to export oil.

Although the US blockade has severely disrupted Iran’s maritime oil exports, it has not stopped them entirely, as some tankers linked to Iran have managed to bypass the blockade, according to cargo tracking group Vortexa and maritime data company Lloyd’s List.

Experts believe Iran can withstand the blockade for at least two more months, based on the existence of up to 130 million barrels of Iranian oil that were already at sea before the blockade took effect.

Nevertheless, Tehran is turning toward other alternatives, including exporting oil by rail to China, which purchases about 90% of Iran’s oil exports, according to Hamid Hosseini, spokesperson for the Iranian Oil Exporters Union.

Iran’s railway infrastructure is connected to the Chinese cities of Yiwu and Xi’an. The Kazakhstan-Turkmenistan-Iran corridor opened in 2014 and was expanded through the 10,400-kilometer Chinese freight line completed in 2025.

Hanke said: “Railways can transport strategically significant quantities, but in the short term they cannot replace giant oil tankers.”

He added: “Their importance lies partly in logistics and partly in politics, because they operate entirely outside any waterway that Western navies can monitor, and outside the dollar payment system, especially since China has been paying for Iranian oil in yuan since 2012.”

Kelanic, meanwhile, said that transporting oil by sea remains more efficient, but there are land-based methods Iran can use to bypass the US ban.

She added: “Iran can also transport oil by trucks through land routes, as Iraq previously did by moving oil through Syria to the Mediterranean in order to avoid the Strait of Hormuz.”

She continued: “In the short term, quantities will be lower due to the limited number of transport trucks, but importing countries or third parties may provide additional trucks, either as political support for Iran or because they seek greater access to oil in a market suffering from supply shortages.”

The S&P 500 and Nasdaq remained close to new record highs on Thursday, supported by the continued decline in oil prices amid hopes for an agreement between the United States and Iran that could restore crude flows through the Strait of Hormuz to normal levels.

Officials and sources said that the United States and Iran are nearing a limited and temporary agreement to stop the war, with growing optimism that this could pave the way for reopening the narrow waterway, which is considered a vital artery for global energy and trade.

Tehran is expected to respond to the peace proposals soon.

Global stocks recorded new record highs, while oil prices fell by about 4%, moving further away from the $100 per barrel level.

Robert Pavlik, senior portfolio manager at Dakota Wealth, said:

“I would be surprised if this conflict continues for a long time. And if it does continue, it will be because the Iranians want to prolong it. I think Trump wants to end this matter.”

The strong and continued rally in technology and artificial intelligence stocks also played a major role in pushing US equities to new historic highs, as investors welcomed signs of strong demand for AI technologies, alongside a strong earnings season and positive economic data.

However, momentum in technology stocks appeared to slow somewhat on Thursday, as US-listed shares of Arm Holdings fell by 6.9% due to concerns about the company’s ability to secure sufficient supplies for its new AI chips despite its strong profit outlook.

Intel shares also declined by 3.3%, while Advanced Micro Devices (AMD) shares fell by 2%.

By 09:40 a.m. Eastern Time, the Dow Jones Industrial Average rose by 39.22 points, or 0.08%, to 49,949.81 points, while the S&P 500 gained 5.43 points, or 0.07%, to 7,370.55 points, and the Nasdaq Composite added 79.70 points, or 0.31%, to 25,918.64 points.

Six out of the 11 major sectors within the S&P 500 declined, with the energy sector posting the largest drop at 2.1%.

Data showed that the number of Americans filing new claims for unemployment benefits rose by less than expected last week, as layoffs remained low, supporting labor market stability.

After the release of a strong private sector jobs report on Wednesday, investors are awaiting the more comprehensive nonfarm payrolls report on Friday, amid expectations of an increase of 62,000 jobs in April after a rise of 178,000 jobs in March, according to a Reuters survey of economists.

Traders continued betting that the Federal Reserve will keep interest rates unchanged through the end of the year, amid resilient labor market conditions and elevated energy prices. This marks a major shift compared to earlier expectations of multiple rate cuts before the outbreak of the war.

Later today, Minneapolis Federal Reserve President Neel Kashkari, Cleveland Federal Reserve President Beth Hammack, and New York Federal Reserve President John Williams are all scheduled to speak. All three are voting members this year on the Federal Open Market Committee.

In other stock movements, cybersecurity shares rose after Datadog raised its full-year profit forecasts. The company’s stock jumped by 30%, while CrowdStrike and Palo Alto Networks shares rose by 4.8% and 6.4% respectively.

Meanwhile, Snap shares fell by 2.2% after the Snapchat parent company announced that first-quarter advertising revenue had been affected by the Middle East war and slower growth in North America.

Whirlpool shares also dropped by 13% after the home appliance manufacturer missed first-quarter sales estimates and decided to suspend dividend payments.

Advancing stocks outnumbered declining stocks by a ratio of 1.07 to 1 on the New York Stock Exchange, and by 1.09 to 1 on the Nasdaq.

The S&P 500 recorded 13 new 52-week highs against 8 new lows, while the Nasdaq Composite recorded 73 new highs and 34 new lows.

Bitcoin is trading at a sensitive technical point after successfully reclaiming the $80,000 zone, but the market has not yet confirmed a clear and sustainable bullish breakout. Despite the improvement in the technical structure being sufficient to keep upside targets in play, risks remain elevated as the price approaches key resistance levels.

The main challenge now lies in Bitcoin’s ability to turn the $80,000 to $82,000 zone from a temporary breakout area into a real support level. If successful, the cryptocurrency could move toward $85,000 and later $90,000. Failure to hold above this region, however, could turn the recent rally into nothing more than a rebound within a broader corrective trend.

A shift in market behavior

Bitcoin’s current performance differs from the failed recovery attempts seen earlier during the recent correction phase. The price has managed to return above an important psychological level at a time when short sellers are facing increasing pressure, while buyers have started defending price pullbacks instead of fleeing the market collectively.

This behavior points to a gradual shift in trading dynamics. In weak markets, any rally is quickly sold, while in markets regaining balance, pullbacks become limited, trading ranges tighten, and resistance levels are repeatedly tested until one side succeeds in establishing a clear direction.

Bitcoin appears to have entered this second phase, where overall market sentiment has improved without yet reaching the stage of a strong momentum-driven breakout.

ETF funds support the bullish trend

Demand coming from spot exchange-traded funds remains the key supporting factor for the market at the moment. These funds provide a real institutional demand channel that absorbs actual supply from the market, unlike speculation based solely on futures contracts and leverage.

Although inflows into these funds do not always lead to immediate price increases, continued buying gradually reduces available supply, especially as long-term Bitcoin holders continue maintaining their positions.

ETF funds have also changed the nature of Bitcoin cycles compared to previous years, making the cryptocurrency more sensitive to macroeconomic factors such as interest rates, liquidity, and risk appetite rather than relying entirely on retail investor speculation.

The macroeconomic environment remains the biggest risk

Despite improving risk appetite in markets, the broader economic environment still represents a challenge for high-risk assets, led by Bitcoin.

If expectations persist that the Federal Reserve will keep interest rates elevated for a longer period, this could limit liquidity flows toward non-yielding assets such as gold and Bitcoin.

In this context, the cryptocurrency needs continued ETF inflows or increased demand linked to inflation hedging in order to maintain upward momentum.

The halving effect remains present

The impact of the 2024 halving event continues to work gradually in the background of the market, as the event reduced new Bitcoin supply, enhancing the effect of any increase in institutional demand.

This situation is supported by several factors, most notably:

Lower new Bitcoin supply.

Continued institutional demand through ETF funds.

Long-term investors holding large amounts of the cryptocurrency.

Declining balances available on exchanges compared to previous cycles.

However, risks remain related to miners or highly leveraged investors engaging in profit-taking sales during each rally.

Derivatives indicate the market has not yet reached saturation

The recent rally forced many short sellers to close their positions, helping accelerate the rise above the $80,000 level.

But the most important positive factor is that funding rates in the derivatives market remain moderate, meaning the market has not yet entered an excessive “overbought” phase or a leverage-driven speculative bubble.

This indicates that room remains open for further upside, provided real demand in the spot market continues.

Technical analysis: $85,000 is the decisive test

Bitcoin is currently attempting to confirm a technical breakout from a price base that lasted several weeks, with reclaiming the $80,000 level representing the first positive signal, followed by stability above the $82,000 to $83,000 range.

However, the real test lies in breaking through the $85,000 level, where sellers are expected to become active again.

The current key technical levels are as follows:

$90,000: The next major upside target.

$85,000: The bullish breakout confirmation level.

$82,000 to $83,000: Short-term resistance.

$80,000: The current decision zone.

$76,000 to $78,000: Important psychological support.

$72,000: Major structural support, with a break below it weakening the bullish scenario.

The bullish scenario

The positive scenario is based on continued stability above $80,000, alongside ongoing ETF inflows and leverage remaining under control.

In this case, Bitcoin could move first toward $85,000, then later toward $90,000. A break above $90,000 could also completely shift market psychology and push more institutional capital into the market.

The bearish scenario

The negative scenario begins if Bitcoin fails to break above the $85,000 level, which could prompt traders to take profits and push the price back toward $80,000.

A break below $78,000 would increase the likelihood that the recent rally turns into a false breakout, while a drop below $72,000 would represent a clear signal of weakness in the current bullish structure.

Fundamental outlook

The current outlook remains cautiously positive, as Bitcoin’s technical and fundamental situation has improved thanks to the return of institutional demand and easing selling pressure, but the market still needs decisive confirmation through a break above the $85,000 level.

At the moment, the cryptocurrency appears to be in a recovery phase rather than a confirmed bullish breakout phase.

Oil prices extended their losses on Thursday, declining by about 2% to below the $100 per barrel level, amid renewed hopes for a peace agreement between the United States and Iran that could lead to a gradual reopening of the Strait of Hormuz.

Brent crude contracts fell by $1.95, or 1.93%, to $99.32 per barrel by 09:12 GMT, while US West Texas Intermediate crude declined by $1.93, or 2.03%, to $93.15 per barrel.

Thursday’s session witnessed sharp volatility, with Brent crude trading ranging between gains of 1% and losses of 3.8% compared to the previous session’s close.

Both benchmark crudes had fallen by more than 7% on Wednesday, recording their lowest levels in two weeks amid optimism over the possibility of ending the war in the Middle East.

The decline continued on Thursday as investors reacted to new headlines pointing to possible progress toward peace talks.

Analysts pointed to a report by Saudi channel Al Arabiya stating that understandings had been reached to ease the US blockade in exchange for a gradual reopening of the Strait of Hormuz, in addition to another report by Israel’s Channel 12 stating that Iran had agreed in principle to transfer its stockpile of 60% enriched uranium to a third country. Reuters could not independently verify these reports.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said: “From a broader perspective, oil markets have remained caught between diplomacy and disruption for more than two months, while investor sentiment has been affected by news headlines almost daily.”

She added: “If a formal agreement is ultimately reached, oil prices could witness a rapid collapse as geopolitical risk premiums disappear from the market. However, any new signs of attacks targeting oil infrastructure or escalation in the Middle East could easily trigger another sharp surge in prices.”

Iran had announced on Wednesday that it is reviewing the US peace proposal, which sources said could formally end the war, but leaves unresolved major US demands including suspending Iran’s nuclear program and reopening the Strait of Hormuz.

Earlier this week, US Treasury Secretary Scott Bessent called on China to intensify its diplomatic efforts to persuade Iran to reopen the strait to international shipping, adding that US President Donald Trump and Chinese President Xi Jinping would discuss the issue during their meeting next week.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said: “Peace negotiations are likely to continue at least until the US-China summit next week, but expectations beyond that remain uncertain.”