It can, in theory. In practice, there are some ports that actually need a full Xcode installation to build, and those would just fail without Xcode.
In an ideal world, there would be a dependency declared on Xcode for all those ports so MacPorts would work with command line tools only and fail gracefully whenever Xcode is required. However, that is currently not the case because nobody implemented an easy and automated way to tell whether a port will build fine without Xcode.