US War with Iran: Basra Offensive Fails, Preparations Continue

US Naval Deployments

In any conflict with Iran, the risk to the US Navy is substantial, because of Bush's reckless deployment of ships close to Iranian land based missiles, in another example of Bush's seeming failure to consider anything other than his own intentions when making decisions. Or are our ships and sailors bait to create a incident serious enough to justify going to war with Iran?

Rumor of an Iran Internet Cutoff

An unusual number of undersea cable failures caused wide-spread service degradation throughout the Middle-East, except for Israel and Iraq. While some of these cuts may have been deliberate acts, until the cable break sites are inspected and repaired, the nature of the damage remains unknown. Given some confusion about dates among sources, these are the probable dates as well as known locations and cable systems involved:

1. 01/23/08: the Flag Europe-Asia, off Egyptian coast, (submarine cable cut);

2. 01/27/08: the SeaMeWe-4 (South East Asia-Middle East-Western Europe-4), off Egyptian coast, (submarine cable cut);

3. 01/30/08: Flag Falcon, between UAE and Oman, (submarine cable cut);

4. 02/01/08: Qatar Telecom, between Qatar and the UAE, (fire in a related power system).

Reports that Iran's internet service had been completely cut off were incorrect, which may have arisen from misinterpreting a few failed link paths caused to the cable losses. Iran's service losses were about 20% of capacity.

The US Navy has capabilities specifically focused on undersea cable tapping and cutting operations: Blind Man's Bluff: The Untold Story of American Submarine Espionage, by Sherry Sontag and Christopher Drew (New York: Public Affairs, 1998).

Changing US Dollar's Role in Oil Trading

Some of the cable failure speculation centered around the new Iran Oil Bourse (IOB), whose planned start coincided with the cable failures. The IOB is an Internet based, peer-to-peer oil trading system being established by the Iranian government with the assistance of Chris Cook, a British subject, who was once director of the International Petroleum Exchange and the originator of the idea upon which IOB is based. A report on IOB states that "Cook believes that the proposed IOB structure will remove much of the current price volatility caused by a toxic combination of speculation by hedge funds and market manipulation by intermediary traders." Another feature of the system of some strategic import: It ends the US Dollar role as the settlement currency for oil trades.

Summary:

Our overall assessment remains largely unchanged from our March 10, 2008 report New UN Sanctions Make US-Iran War More Likely:

"The more significant Iran's response or the more disruptive the economic and political consequences, the more likely the attack on Iran would be combined with or be followed by a formal declaration by Bush of a national emergency, possibly affecting US national elections, resulting in a de facto coup d'état and the most serious destabilization of the United States since the civil war. While these risks would normally result in swift dismissal of such a plan of action, unfortunately such an attack on Iran would be consistent with Bush's history of striking out at those who impede or criticize him as well as his willingness to take radical actions because of an apparent failure to appreciate the institutional and systemic costs involved.

While there is some chance of stabilizing the situation early in the sequence of escalating events, this would require the concerted efforts of responsible US, Iranian, and international governing authorities, provided Bush can be persuaded to halt the attacks, the Iranians to limit their response to within their borders, and the rest of the world's governments and populace to respond with sufficient restraint. But history gives small comfort about such a turn of events involving nations with irresponsible leadership and substantial resources."

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