Umair Khalil: Iran and the Strait – Prospects and Implications

Consider this question: if you were the policymaker of a country on the verge of an economic catastrophe and involved in a complex political imbroglio with the world’s foremost power, would you attempt to close down ‘the world’s most important oil chokepoint’ (which – according to international law – belongs to no one in particular)? For the sake of peace, personally I would avoid doing so.

I ask the question because Iran has threatened to shut off the Strait of Hormuz, a strategically important shipping passage which links major oil-rich Gulf States to the rest of the world and through which almost one-fifth of the world’s oil passes. According to various analysts, if Iran blocks the Strait entirely, the global oil prices could increase by 50 percent or more in a matter of days. The Iranian decision of obstructing the strategically vital sea route may arise as a result of the latest US sanctions against Iran and mounting European pressure which might lead to the possibility of an oil embargo.

There is absolutely no questioning Tehran’s military capability of blocking the Strait; which, according to Iran, is ‘easier than drinking a glass of water’. The Strait is only 21 miles wide at its narrowest point and according to Roy Jordan of FACTS Global Energy, ‘All it would take for Iran is a few mines … and ship owners and insurance companies would not go up there’. However, Iran should also bear in mind that its own faltering economy relies on at least two million barrels of oil exports which pass through the Strait. A blockage of the passage and possibility of a military confrontation could have severe repercussions on its own battered economy.

My opinion is the Iranian threat presents an insight into the mindset of Iranian policymakers. It represents Iran’s growing economic desperation as the Iranian Riyal continues to plummet against the US dollar (One US dollar now, is worth 18,000 Iranian Riyals). Furthermore, it also epitomizes the recklessness of Iran’s leadership and its disdain for international law. International analysts continue to be at a loss to understand what Iran really wants to do? Whether Iran is bluffing or attempting to increase global oil prices is still unclear.

Nevertheless, if Iran chooses to act aggressively and closes the passage down, its actions will have serious consequences. There are several possibilities as to what might actually happen:

  • The blockade can lead the US to launch a physical military strike on the Iranian naval fleet. This physical confrontation can, in turn, lead to a major full-scale war.
  • Iran’s actions can also provoke US military forces to assume control of the Strait. This action will definitely be backed by the international community. Any such control would inevitably yield the result that Iran is currently seeking to avoid – an embargo on its exports.
  • The Gulf States, in view of their own economic concerns, can help the US to build some sort of security mechanism to monitor the Strait. This would place Iran at a more disadvantaged position.

Sadad Ibrahim Al-Husseini, former head of exploration and development at Saudi Aramco, thus, put is as such:

To close the Strait of Hormuz would be an act of war against the whole world. You just can’t play with the global economy and assume that nobody is going to react.

Another important aspect to consider is that more than 85 percent of the oil and most of the natural gas that flows through the Strait goes to China, Japan, India, South Korea and other Asian nations. Russia and China, in the Security Council, have always been something of a hindrance in America’s quest to completely strangle Iran economically. This confrontation can also lead these two states to adopt a more stringent stance on the Iranian nuclear programme. China is Iran’s most important customer and a major importer of Gulf oil. Any Iranian attempt to block the Strait could severe the Chinese-Iranian business ties. Moreover, China and the US can even form some sort of alliance over the issue, even though China opposes US sanctions.

Although the US and Europe have imposed sanctions on Iran, there’s still a possibility that their efforts could backfire. For example, a penalty on foreign companies dealing with Iran’s central bank could become a cause of escalating international oil prices which could trigger a new wave of global recession. This would be a serious blow to the US government’s decision-making credibility and would also ruin the already-minute prospects of the victory of President Obama’s Democratic Party in the upcoming elections. What needs to be done in this situation is to allow exceptions and the waiver of penalties where there is a threat to US national interests or a possibility of an increase in oil prices. Equally, both the US and the EU should renew pressure on Russia and China to go for stricter United Nations sanctions, the possibility of which is highly unlikely.

The author, Umair Khalil, is a researcher at PIIA and a student of Department of International Relations, University of Karachi


1 Comment

Filed under Discussion, Energy, Iran, Sanctions, Shipping, The Middle East

One response to “Umair Khalil: Iran and the Strait – Prospects and Implications

  1. Ameer Ahmed Farooqui

    Andrew Eiva also played a huge role in the Soviet war against Afghanistan. The CIA and Pentagon absolutely hate him

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