When it comes to U.S. policy toward Iran, irony is the name of the game. Where to begin? The increasingly fierce sanctions that the Obama administration is seeking to impose on that country's oil business will undoubtedly cause further problems for its economy and further pain to ordinary Iranians. But they are likely to be splendid news for a few other countries that Washington might not be quite so eager to favor.
Take China, which already buys 22% of Iran's oil. With its energy-ravenous economy, it is likely, in the long run, to buy more, not less Iranian oil, and -- thanks to the new sanctions -- at what might turn out to be bargain basement prices. Or consider Russia once the Eurozone is without Iranian oil. That giant energy producer is likely to find itself with a larger market share of European energy needs at higher prices. The Saudis, who want high oil prices to fund an expensive payoff to their people to avoid an Arab Spring, are likely to be delighted. And Iraq, with its porous border, its thriving black market in Iranian oil, and its Shiite government in Baghdad, will be pleased to help Iran avoid sanctions. (And thank you, America, for that invasion!)
Who may suffer, other than Iranians? In the long run, the shaky economies of Italy, Greece, and Spain, long dependent on Iranian oil, potentially raising further problems for an already roiling Eurozone. And don't forget the U.S. economy, or your own pocketbook, if gas prices go up, or even President Obama, if his bet on oil sanctions turns out to be an economic disaster in an election year.
In other words, once again Washington's (and Tel Aviv's) carefully calculated plans for Iran may go seriously, painfully awry. Now, in all honesty, wouldn't you call that Kafkaesque? Or perhaps that's a question for the Pentagon where, it turns out, Kafka is in residence. I'm talking, of course, about Lieutenant Commander Mike Kafka. He's a spokesman for the Navy's Fleet Forces Command -- believe me, you can't make this stuff up -- and just the other day he was over at the old five-sided castle being relatively close-mouthed about the retrofitting of a Navy amphibious transport docking ship as a special operations "mothership" (a term until now reserved for sci-fi novels and Somali pirates). It's soon to be dispatched to somewhere in or near the Persian Gulf to be a floating base for Navy SEAL covert actions of unspecified sorts, guaranteed not to bring down the price of oil.
Certainly, the dispatch of that ship in July will only ratchet up tensions in the Gulf, a place that already, according to Michael Klare, TomDispatch regular and author of the upcoming book The Race for What's Left: The Global Scramble for the World's Last Resources, is the most potentially explosive spot on the planet. Tom
Why Closure of the Strait of Hormuz Could Ignite a War and a Global Depression
By Michael T. Klare
Ever since December 27th, war clouds have been gathering over the Strait of Hormuz, the narrow body of water connecting the Persian Gulf with the Indian Ocean and the seas beyond. On that day, Iranian Vice President Mohammad Reza Rahimi warned that Tehran would block the strait and create havoc in international oil markets if the West placed new economic sanctions on his country.
"If they impose sanctions on Iran's oil exports," Rahimi declared, "then even one drop of oil cannot flow from the Strait of Hormuz." Claiming that such a move would constitute an assault on America's vital interests, President Obama reportedly informed Iran's supreme leader Ayatollah Ali Khamenei that Washington would use force to keep the strait open. To back up their threats, both sides have been bolstering their forces in the area and each has conducted a series of provocative military exercises.
All of a sudden, the Strait of Hormuz has become the most combustible spot on the planet, the most likely place to witness a major conflict between well-armed adversaries. Why, of all locales, has it become so explosive?
Oil, of course, is a major part of the answer, but -- and this may surprise you -- only a part.
Petroleum remains the world's most crucial source of energy, and about one-fifth of the planet's oil supply travels by tanker through the strait. "Hormuz is the world's most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011," the U.S. Department of Energy noted as last year ended. Because no other area is capable of replacing these 17 million barrels, any extended closure would produce a global shortage of oil, a price spike, and undoubtedly attendant economic panic and disorder.
No one knows just how high oil prices would go under such circumstances, but many energy analysts believe that the price of a barrel might immediately leap by $50 or more. "You would get an international reaction that would not only be high, but irrationally high," says Lawrence J. Goldstein, a director of the Energy Policy Research Foundation. Even though military experts assume the U.S. will use its overwhelming might to clear the strait of Iranian mines and obstructions in a few days or weeks, the chaos to follow in the region might not end quickly, keeping oil prices elevated for a long time. Indeed, some analysts fear that oil prices, already hovering around $100 per barrel, would quickly double to more than $200, erasing any prospect of economic recovery in the United States and Western Europe, and possibly plunging the planet into a renewed Great Recession.
The Iranians are well aware of all this, and it is with such a nightmare scenario that they seek to deter Western leaders from further economic sanctions and other more covert acts when they threaten to close the strait. To calm such fears, U.S. officials have been equally adamant in stressing their determination to keep the strait open. In such circumstances of heightened tension, one misstep by either side might prove calamitous and turn mutual rhetorical belligerence into actual conflict.
Military Overlord of the Persian Gulf
In other words, oil, which makes the global economy hum, is the most obvious factor in the eruption of war talk, if not war. Of at least equal significance are allied political factors, which may have their roots in the geopolitics of oil but have acquired a life of their own.