Sorry, where did I say Spanish and Portugese trade was restricted? The Spanish will be asked nicely (possibly with territorial concessions) not to transship, while there will be no restrictions on Portugal, why restrict trade to a country that can do squat to send the stuff anywhere?
That's what I take when I read comments like 'Britain will close the Mediterranean because they have Gibraltar' or 'Put some second-rated ships off the coast of Iberia and there is not much to do to blockade the entire European continent'.
Well, I don't remember if it was specifically you who said that and I'm too lazy to look it up now anyway.
The way I see it, if you want to blockade Italy, well, blockade Italy. You can draw a pretty nice line from Toulon to Corsica, Tunisia, Malta and Cyprus. With this in mind, some action against Sardinia is probably a given. The bulk of the French fleet is already in the Mediterranean.
In other front, I wonder if the Allies can hang onto Greece in this scenario, and/or for how long.