The Most Important Waterway In The Oil World
Tensions between the United States and Iran continue to rise, with U.S. President Donald S. Trump issuing a threatening tweet against Iran’s President Hassan Rouhani amidst preparations to re-impose sanctions on Iran’s economy following the U.S. withdrawal from the 2015 nuclear deal.
The increasingly tense situation has given rise to fears of violence, perhaps even open warfare in the Persian Gulf, where one-third of the world’s oil is produced.
A key element of Iran’s strategy in such a conflict would be to close the Strait of Hormuz, the waterway through which most of the Gulf’s oil flows. Iranian officials have made several threats in this direction, in response to the escalating tensions with the U.S.
Iranian leaders frequently threaten to close the Strait, and commentators have warned that such an action is a real possibility. Iran’s military and conservative leadership, the most hardline members of its government, have rallied around President Rouhani’s threat.
Iran possesses the means to close the strait militarily, and keep it closed for several months, using a fleet of small craft, ballistic missiles and large numbers of ocean mines that would make the strait impassable.
Closing the Strait of Hormuz would send oil prices skyrocketing upwards. It would affect the members of the Gulf Cooperation Council (GCC), including Saudi Arabia, Kuwait and the United Arab Emirates (UAE). All three are major producers of oil and gas and depend on an open strait to access global markets.
But is Iran’s leadership really prepared to take such action? Despite the war of words erupting between Tehran and Washington, it is unlikely Iran’s government is prepared to take such a drastic step now or in the immediate future, even as President Trump appears to threaten Iran with military action. There are several reasons for this.
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