Trump's Secret IRGC Channel Adds 21% Oil-Route Risk Premium

The Trump administration opened a secret channel to Iran's Revolutionary Guard in May through Iraqi Kurdistan's president, seeking to verify that Tehran's negotiators spoke for the military wing that now dominates a five-month-old war.

"Barzani is a pragmatic person who knows how to solve problems. He is respected throughout the region. He knows almost everyone in both Tehran and Washington. He's the person you call in a delicate situation," Brett McGurk, who has advised four U.S. presidents on Middle East policy, said.

On May 10, then-Director of National Intelligence Tulsi Gabbard called Barzani with the approval of President Donald Trump and Vice President JD Vance, asking him to reach IRGC Commander Gen. Ahmad Vahidi. Four days later, an IRGC official arrived in Erbil with an encrypted phone, and Vahidi told Barzani: "I fully support them and that is also the position of the IRGC. We prefer to resolve this crisis through negotiation." Washington then proposed secret talks in Erbil, but Iran declined over concerns that Israeli intelligence could target its delegation.

The back channel exposes the core problem in the U.S.-Iran standoff: with the Strait of Hormuz carrying about 21 percent of global oil trade, any miscalculation risks a supply shock that would push crude prices sharply higher. Tehran reaffirmed Saturday that the strait "will remain Iranian," after Trump claimed it would become American territory once Iran is "defeated."

Who Really Runs Tehran

The Guard's grip on power has tightened since the Feb. 28 strike that killed Khamenei and other senior officials, wounding his successor, Mojtaba Khamenei, whose health status remains unknown. With the new supreme leader absent from public view, IRGC commanders became the primary authority over any draft agreement on the regional conflict or relations with Washington.

That shift forced the White House to question whether Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi — the officials negotiating with the United States — had the authority to conclude a deal the Guard might later reject. Iran's response to a proposed agreement was delayed more than 10 days in mid-May, prompting Washington to seek a parallel line to the Guard leadership.

Barzani, who lived in Tehran during the Iran-Iraq War and studied at the University of Tehran, speaks fluent Persian and maintains personal ties across the Iranian establishment. His mediation, however, stalled at the proposed Erbil meeting. Iranian officials feared Israeli intelligence penetration of Iraqi Kurdistan and worried their delegation could be assassinated in transit or in the city.

The Hormuz Sticking Point

The war, which began after the Feb. 28 strike and the April 8 cease-fire that followed, has killed thousands and left the Strait of Hormuz as the central obstacle to a settlement. The waterway carries roughly 21 percent of global oil consumption, making it the single most sensitive chokepoint for energy markets. Trump's threat to bomb Oman if it obstructs the United States adds a second Gulf state to the risk map, potentially disrupting shipping lanes that move a fifth of the world's crude.

Mediators from Pakistan and Qatar continue to shuttle messages between Washington and Tehran, though sources say some reports from intermediaries are overly optimistic and do not reflect the stalemate on fundamental issues. Barzani has offered in recent days to resume his mediation role, and observers expect Erbil to remain a vital back channel as long as official protocols hit dead ends.

The last time the United States and Iran traded direct threats over the strait, in 2019, Brent crude jumped more than 14 percent in two weeks after attacks on tankers near the waterway. A repeat scenario now, with the war already five months old, would compound a risk premium that options markets are already pricing into crude and safe-haven assets.

This article is for informational purposes only and does not constitute investment advice.