The dangerous situation in Iran has escalated. Iranian Vice President Mohammad Reza Rahimi has announced that if Western countries place any more sanctions upon the nation, there will be a military will blockade the Strait of Hormuz. Their blockade will refuse to allow any ships to pass, including oil tankers. This is a very serious threat considering one fifth of the world’s oil passes through the straight. This is a very serious threat to the world’s oil supply and a major threat to oil profits that dominate Western society. If history has shown us anything, it is that any threat to the control of oil, or the oil supply, will be met with violence.
To demonstrate that they are serious in their threat, Iran has begun a ten day Naval exercise in the strait. Iran’s naval manoeuvres included the laying of mines and the use of aerial drones, according to Iranian media. Missiles and torpedoes were to be test-fired in the coming days. A military build up this size and this serious a threat has caused investors worry. The price of a barrel of oil has risen to over 100 dollars in recent days. The amount of oil coming out of Iran is significant as well, Iran is the third largest exporter of oil in the world. The threat of a shortage of oil will be taken quite seriously by the US and its imperialist allies.
The US is clearly worried abut what effect this is having, and the effect it will have if a blockade does indeed become placed. A State Department spokes woman Victoria Nuland answered these statements by Iran on Thursday calling the move to block the oil and the Strait of Hormuz “irrational behaviour”.
“One can only guess that the international sanctions are beginning to feel the pinch, and that the ratcheting up of pressure, particularly on their oil sector, is pinching in a way that is causing them to lash out.”
– Victoria Nuland, State Department
The US is well aware of the invaluable nature of the Strait. The US Navy’s Fifth Fleet is based in Bahrain specifically to defend the the safe traffic of oil through the Gulf. That is its main reason for maintaining a significant naval presence in the region.
If Iranian oil does indeed come off the market and other oil is prevented from reaching the West, as well from a Naval blockade, there will be a shortage and a price hike. The amount of oil in question is significant. There is currently no source able to fill that shortage. Even a new fledgling oil supply coming out of the recovering Libya is not enough to make up the gap. Obviously an increase in energy costs will be felt across all economic sectors and will raise the price of commodities.
The situation is clearly a very tense one. The US has proposed a military hotline between Tehran and Washington with the purpose of direct communication to avoid any misunderstandings. This is very similar to the hotline between the US and the Soviet Union during the Cold War. Of course this is a different situation but the stakes may be just as high if indeed Iran does posses nuclear weaponry.
This demonstrates how much power Iran may actually have if it is able to cause such a spike in oil prices. It may appear that the embattled Middle Eastern nation may not be as defenceless as previously thought. What they may lack in fire power compared to the US, they may have in economic clout. Oil is practically the life blood of the American economy and almost the centre of American politics. The US empire will not react lightly to any such threat to its supply of oil.