On his subject he first listed practical political implications of this. First, the fallacy that Iran is rising and this must be dealt with quickly to dampen its nuclear progress and lose the support of the younger generation. Second, Iran is rising, so it should be bombed immediately. Military action should be a last resort. We don’t understand the ramifications and diminishing returns; there is inertia among politicians. Third, as with the Soviets, we don’t have to do anything; the deterrence theory requires communication of the enemy’s intentions and the desire to avoid conflict.
Hats off, moreover, to the Iran regime for representing its economy as good though very dependent. 38 to 39 percent of its oil must be imported [from the United Arab Emirates, France, and the Netherlands] because of its paucity of refineries. There is no oil reserve in Iran and it can’t subsidize its oil consumption—oil there used to cost thirty-eight cents per gallon.
Ninety percent of Iran’s wealth is concentrated in foundations, the revolutionary guard, and rich families, increasing its vulnerability. The war on terror has deflated Iran’s economy but rising oil prices have compensated, allowing it to build up a slush fund of $50 billion. But Iran still requires foreign investment to increase its oil production and maintain it. But investors are backing off; weapons manufacture and nuclear supplies are consequently growing more expensive.
This former pariah is reaching out to the world, but with dual results: Japan, the Netherlands, and Germany, for example trade with the US in larger quantities than with Iran—sixty times as much, forcing Iran to choose whom to deal with.
Two weeks ago, Russia’s Lukoil pulled out of Iran because of sanctions, taking more than $20 billion with them and turning to the US.
Economic strategies must precede attacks targeting Iran’s rich environment.
Finally, there is a window of opportunity: if Iran gets the bomb tomorrow, economic warfare will become difficult. We must keep our eyes on the clock because the window is closing. France announced that Iran would be spinning three thousand centrifuges. In a year it can produce enough enriched uranium to produce one bomb. We should move soon.
James Phillips, a research fellow for Middle Eastern Affairs for the Heritage Foundation, spoke on “Iran-Related Energy Security Threats.” Since 1978 he had predicted the Soviet invasion of and defeat by Afghanistan.
Oil is the most important strategic commodity, he reiterated. It holds 10 percent of the world’s conventional oil reserves. Canada and Venezuela hold more, but of different categories harder to mine, for example. Iran holds 15 percent of the world’s natural gas reserves and is the fourth largest oil exporter; in 2006, it exported 2.5 million barrels. Its population is the largest among the OPEC countries. It didn’t join the countries that imposed the oil sanctions of 1973, providing Israel and South Africa with oil.
Oil workers striking in Iran crippled the shah and helped the mullahs to power, who are now a destabilizing force that tried to radicalize the Saudi Shi’a and those of Iraq, provoking Saddam to invade in what became one of the bloodiest wars since World War II. This war wasn’t covered by Western reporters; both countries were heavily scarred and both sought to thwart oil production in other countries.
Iran escalated attacks on supporters of Iraq, targeting neutral ships and mining the Gulf and the Red Sea. In response, the US cleared the mines and escorted ships through these waters.
Such actions should signal to military planners that Iran will resort to similar tactics in the event of another confrontation and will use oil as a weapon.
In June 2006 Ayatollah Khameini said that if Iran is attacked, the world’s energy supply is endangered; now that threat encompasses US allies across the Gulf.
17 million gallons of oil pass through the eastern Gulf daily, where 40 percent of oil is traded. Iran’s military has grown greatly; its weapons have been updated, but its navy and air force are weak, though upgraded since the 1990s with the aid of Russia.
Its missiles are designed like those of Russia and China and it is well stocked with Chinese missiles and antiship cruise missiles, already used against Israel in Lebanon in the 1980s. Its mines have been updated by China.
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