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James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Iran To Close Key Oil Shipping Lanes If U.S. Proceeds With Military Drills

Iran To Close Key Oil Shipping Lanes If U.S. Proceeds With Military Drills

Iranian high officials have threatened to close the vital Strait of Hormuz to the United States and its allies if they threaten the regime in Tehran in the wake of American military drills launched in the Persian Gulf in April.

“If the Americans and their regional allies want to pass through the Strait of Hormuz and threaten us, we will not allow any entry,” deputy commander of Iran’s Islamic Revolutionary Guard Corps (IRGC), General Hossein Salami said on the national television.

The military drills were indeed large-scale, with than 30 countries from six continents involved in what has been dubbed the International Mine Countermeasures Exercise. It took place at major maritime choke points in the world: the Suez Canal, the Strait of Bab Al-Mandeb and the Strait of Hormuz.

Related: Why Oil Prices Will Likely Drop Below $40 Soon

While the stated purpose of the drills is to protect international trade routes, Iran views the drills as a potential threat to its regime.

Salami cited the 1982 UN Convention on the Law of the Sea (UNCLOS), saying that “we have to counter any harmful and ill-intended passage through Strait of Hormuz.” He did not expound on what the Iranian leadership would classify as a threat.

Iranian Supreme Leader Ayatollah Ali Khamenei, echoed those sentiments, saying that the Iranian military also has rights to be present in the region.

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The Strait of Hormuz accounts for almost one-third of the world's oil trade sea passages. Kuwait, Bahrain, Qatar, Saudi Arabia, Iraq and the United Arab Emirates all rely on the Strait of Hormuz to export oil by tanker to Europe and the Far East. This strait connects up the Persian Gulf, the Gulf of Oma and the Indian Ocean and is some 180 kilometers long. At its narrowest point, it’s about 55 kilometers wide, and easy to blockade.

For the past year, the U.S. Navy has been accompanying American-flagged ships in the Strait of Hormuz, providing armed escorts, following the Iranian seizure of a Marshall Islands-flagged ship.

In January, 10 US sailors were taken into custody after two U.S. ships entered Iranian territorial waters on their way to Bahrain. The sailors were released within 24 hours.

Iran has threatened to block the strait in the past but has never made good on this threat and typically uses it for leverage. And it is significant leverage that would affect many countries.

By James Burgess of Oilprice.com

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