I can't count how many times I've heard the "overextended military" lament. Is the U.S. Navy overextended? Is the U.S. Air Force overextended? Aren't they part of the "military"?
This leads me to the conclusion that the most viable military option against Iran is not a "shock and awe" style campaign against a widely-distributed and only partially-known nuclear infrastructure. The fact that this infrastructure is likely very hardened, requiring tactical nuclear bunker buster technology to penetrate, is even more of a contra-indication to this type of warfare.
Blockade would be an act of war, but I doubt there is much the mullahs could do about it militarily. Their navy is likely to be destroyed in detail in the event of hostilities, even if they resort to "swarming" tactics. Please. Their air force is also likely to evaporate.
Blockade would necessitate dominance of the Caspian Sea, and this would be enhanced by securing basing or overflight rights in Azerbaijan and Turkmenistan. Efforts along these lines are likely to attract the attention of Russia, not likely to go along.
Consequences of blockade on world oil markets include a predictable surge in price per barrel (duh), which can be mitigated in part by a seizure of some of Iran's oil assets and by bringing the Iraqi oil industry online as soon as possible. Indeed, in the face of blockade the mullahs are unlikely to realize any profit (no blockade is 100% effective) from the skyrocketing oil prices, but the Iraqis and other middle east regimes certainly would. Such potential windfalls may dampen criticism from these middle east regimes, especially the ones alarmed by the sudden dominance of Iran.