President Donald Trump just turned up the heat on Iran in a big way. In a Truth Social post Monday night, he announced that any country doing business with Iran will face a 25% tariff on all transactions with the United States. And in case anyone missed the message, he added that "this order is final and conclusive."

The Backdrop: Protests and Crackdowns

The tariff threat comes as Iran deals with widespread anti-government protests and a brutal government response. According to HRANA, a U.S.-based rights group, the crackdown has resulted in 490 civilian deaths, 48 security personnel killed, and more than 10,800 arrests. State TV footage has shown funerals for security personnel and dozens of body bags at Tehran's coroner's offices.

Trump signaled his support for protestors on Friday, saying he would come to the "rescue" of the Iranian people demonstrating against Supreme Leader Ali Hosseini Khamenei's regime. Speaking to reporters aboard Air Force One on Sunday, Trump said Iranian leaders "want to negotiate" after he threatened military action, but warned that "we may have to act before a meeting."

Who Actually Trades With Iran?

Here's where things get interesting. Despite extensive sanctions that have been in place for years, U.S. goods and services trade with Iran still totaled $838.4 million in 2024, according to the U.S. Trade Representative. But the real action happens elsewhere.

Iran's biggest trading partners include China, Turkey, the United Arab Emirates, Iraq, and India. The country's exports are heavily concentrated in petroleum and natural gas products, according to United Nations COMTRADE data on international trade. Which brings us to the part that should worry anyone paying attention to energy markets.

Energy Market Implications

Iran produces over 4 million barrels of oil per day, making it one of the world's largest oil and gas producers. Trump's tariff announcement isn't happening in a vacuum. It carries the potential to shake up global energy prices in a meaningful way.

There's also the looming risk of the Strait of Hormuz closing. This narrow shipping corridor, bordered by Iran, the UAE, and Oman, sees roughly 20 million barrels of oil flow through it every single day. Last year, Iran's parliament actually voted to authorize a potential closure of the strait following U.S. airstrikes on the nation's nuclear facilities.

Goldman Sachs analysts have modeled out what happens if that scenario plays out: Brent crude prices could spike to $110 per barrel before eventually moderating. That's the kind of price shock that ripples through everything from gas stations to airline tickets.

Market Reaction

Energy markets responded to the news with predictable nerves. WTI March crude futures were up 0.67% on Monday night, trading at $59.72 per barrel. February natural gas futures moved in the opposite direction, down 0.42% at $3.340 per MMBtu (Metric Million British Thermal Unit).

The iShares U.S. Oil & Gas Exploration & Production ETF (IEO), which tracks leading U.S. oil and gas producers, closed down 0.49% on Monday at $90.60 per share. The fund has shown a favorable long-term price trend, though it faces headwinds in the current environment.

The big question now is whether Trump follows through and how Iran's major trading partners—especially China—will respond. A 25% tariff on all business with countries trading with Iran could force some difficult choices for nations that rely on Iranian oil while maintaining substantial economic ties to the United States.