Source: AFP: Iranian Admiral Iranian Habibollah Sayyari Briefing Map

China Daily.com reported  last night on Iran’s latest warnings that have rattled the world’s oil spot markets:

Iran’s First Vice President Mohammad-Reza Rahimi said Tuesday that Iran will close the Strait of Hormuz if its oil exports are sanctioned by the West, the official IRNA news agency reported.

If the exports of Iran’s oil are sanctioned by the West, no drop of oil will pass through the Strait of Hormuz, Rahimi was quoted as saying.

“We are not after hostility. Friendship and brotherhood is our slogan. But, the Westerners do not want to give up their plots (against the Islamic Republic),” he said.

Zohreh Elahian, a senior Iranian lawmaker and member of the parliament’s National Security and Foreign Policy Commission said Monday that Iran’s ongoing naval war games in its southern waters should be seen as a serious warning to the West about potential closure of the Strait of Hormuz.

“These war games are a warning to the Western countries about the closure of the Strait of Hormuz,” Elahian said, adding that “If any threat is posed to Iran, the Islamic Republic is capable of closing the Strait of Hormuz.”

The Iranian Navy launched a 10-day massive naval exercise in the international waters on Saturday.

The US has responded by warning Iran about this threat to close the Straits of Hormuz.

As noted in the San Francisco Chronicle report:

The comments drew a quick response from the United States.

“This is not just an important issue for security and stability in the region, but is an economic lifeline for countries in the gulf, to include Iran,” Pentagon press secretary George Little said. “Interference with the transit or passage of vessels through the Strait of Hormuz will not be tolerated.”

Watch this al Jazeera You Tube video report:

 

 

Iranian Adm. Habibollah Sayyari during a Press TV briefing  told of how easily it would be to close the narrow Straits of Hormus through which over 15.5 million barrels of crude oil transit daily entering the world markets, potentially blocking more than 40% of the world’s traded oil supply.   Iran  resurrected grainy videos of their aging F-4 Phantom jets buzzing US Navy vessels of the Fifth Fleet based on Bahrain. They show Iranian fast boats of the Qod Force equipped with frogmen allegedly capable of harassing commercial tankers and US Navy vessels. These nimble craft are also capable of deploying pre-positioned underwater mines.    Iran has also shown videos of test launches of land-based anti-ship missiles.  Then we had pictures of one of Iran’s 20 aging Russian Kilo class submarines raising an Iranian standard in the southwestern area of the Persian Gulf. MEMRI has a translation from an Iranian website detailing the array of conventional means of closing the Straits of Hormuz.

One oil industry observer, John Hoffmeister, former CEO of Shell (USA) operations, founder and head of Citizens for Affordable Energy, opined on CNBC’s Sqwak Box this morning that Iran might resort to using tactical nuclear weapons or even sinking vessels  in the Straits blocking tanker traffic. This is a send-up on what Egypt did to seal the Suez Canal for several years following the June Six days of War with Israel in 1967. The geo-political specter of Iran’s possible closure was reflected in spikes in the oil commodity markets of both West Texas Intermediate crude in the US to slightly below $100 and ICE Brent crude to over $107.00 in London.  All of this activity by the Islamic Republic is aimed at punishing the US for the recent passage of an Amendment to the National Defense Appropriations Act imposing new Central Bank Sanctions on Iran.  These are the toughest of economic sanctions to date against Iran’s nuclear program. They have contributed to unease in the Obama White House about world oil market price volatility possibly tipping the fragile US and world economies into another recession.

Does all of this read like a possible repeat of the tanker wars of 1987-1988 in the final throes of the Iran-Iraq War?   In December 1986, the Kuwait government petitioned the Reagan Administration about protection of its tankers against Iranian threats; the vessels were re-flagged and granted American protection.   Thus began Operation Earnest Will, the largest convoy operations since WWII. US Navy forces were successful in keeping the oil flowing through the Straits of Hormus. US Navy Seal teams were dispatched to destroy Iranian oil platforms in retribution for attacks on US flagged vessels in Operations Prime Chance, Nimble Archer and Praying Mantis.  During the campaign, the Islamic Republic Navy used small boats to harass US flagged vessels and fired Chinese anti-ship Silk Worm missiles against US flagged tankers, injuring crews.

In May 1987 the USS Stark, a missile frigate on station in the Persian Gulf,  was  hit erroneously  by anti-ship Exocet missiles  fired from an Iraqi  Mirage jet fighter  which resulted  in 37 killed and 21 injured of the ship’s crew.   In early July 1988 The USS Vincennes mis-identified  an Iran Air flight for an F-4 fighter aircraft  and  launched a surface to air missile destroying  the civilian aircraft with more than 290 persons aboard, 66  of the victims, children.  Two weeks later the Iranian regime declared a truce.

Could that happen again?   Assuming, the Obama Administration wanted to avoid a causus belli by the Islamic Republic  against the Arab oil producers from Iraq, Kuwait, the Emirates and Saudi Arabia, then as Hoffmeister opined on CNBC this morning, the US Navy  could “line the straits’ with  combat vessels.   Further the US could conduct intensive aerial patrols from the Carrier Task Force positioned there.  The Fifth fleet also has missile boats, presumably equipped with both conventional and nuclear missiles. Not unlike the Tanker War of the late 1980’s, there would be Seal and Small Boat Teams and night stalker helicopters available for special operations. However, given the Islamic Republic’s nuclear and missile programs, there could be other types of missions launched.

However, as Hoffmeister commented, while Iran is crying wolf too often, its leaders are obsessed with fostering an apocalyptic nightmare. That is a reference to the Shia version of rapture and a bizarre event that occurred following the election of President Ahmadinejad in 2005.  Among the first acts of the Ahmadinejad government, he and his cabinet traveled to the holy city of Qom to deliver a signed agreement deposited in the holy well with the moribund 12th Imam to create chaos and bestir him from his 1300 years of slumber. The Shia version of rapture has the awakened 12th Imam leading an army to defeat Jews and infidels, thereby creating a Shia world Caliphate. We couldn’t fictionalize that tableau any better than the reality of what occurred.

The Islamic Republic, should it follow through on this bizarre agreement with the hidden Imam in the holy well in Qom, has to face some practical realities. Its economy is in tatters. The recent tough new sanctions passed by Congress have sent a signal that the US and even the EU have had enough of the posturing of Iran’s leaders investing billions in development of nuclear weapons and missile delivery programs.  Iran’s missile program has the means of hitting targets in the Middle East like Israel, the EU, and perhaps even the US with a ship born EMP attack. (See our NER article on this subject).  Meanwhile the world economy is faltering, China’s economic growth prospects have lowered from a roaring 9% annually to less than half that, 4%.  That means China has lowered demands for energy, perhaps putting a significant crimp in the Islamic Republic’s oil export revenues, further exacerbating the country’s economic conditions.

However, the Supreme Ruler, Ayatollah Khomenei, and President Ahmadinejad persevere in becoming a member of the nuclear club, and likely, soon, given current intelligence estimates.  That has given Israel’s defense establishment pause and pushed the Obama Administration to consider possible means of challenging this outcome. One means is to open up the spigot of domestic oil production, both on-shore and offshore, and complete the Keystone pipeline bringing oil from the Canadian province of Alberta’s vast oil tar sands for refining on the US Gulf Coast.   Those geo-resource policy moves by the West Wing in the Obama White House might send a message to Tehran. Does it want to avoid a repeat of the Tanker Wars of the late 1980’s and think twice about perfecting its nuclear program objectives?

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