How Iran’s Saber Rattling Could Affect Oil Prices and the Environment

It's easy to see the Iranian Mullahs and their allied minions as a world threat. The country is a significant source of crude oil, has a strategic location over the Strait of Hormuz, seems to be busily building an atomic arsenal with missile delivery systems, supports radical and violent extraterritorial groups and many believe is directly funding world terrorism against both Muslims and others. Those facts and an incomprehensible disdain for logic, reason, responsibility and common self-preservation sense cannot but alarm any but the dullest of observers.

The atom bomb matter has the largest destructive and life risking potential and has driven other nations to respond. So far that has only gone as far as economic sanctions, an idea of limited effect. But the suspicion is the effect is having an impact, and if Iran is bright enough to use the sanctions as a tool to justify an oil price increasing effect - thus you have a threat to close the Strait of Hormuz - for whatever the real reason.

Iranian Vice President Mohammad Reza Rahimi has warned that Iran will not allow a "drop of oil" to pass through the Strait of Hormuz if the West widens sanctions against his country.  Iranian Navy Admiral Habibollah Sayyari said it would be "really easy" for his forces to block the waterway through which a sixth of the world's oil flows.

At issue is 40% of the world's tanker-borne oil passes through the Straits. Iran, some of Iraq's and Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates all ship crude oil out the Strait.

Meanwhile, the U.S. maintains a naval presence in the Gulf, primarily to ensure the oil routes remain open. You can bet the battle plans have been thoroughly thought through and practiced out on the U.S. side. The U.S. Fifth Fleet said on Wednesday it would not allow any disruption of traffic in the Strait of Hormuz, a day after Iran threatened to stop ships moving through the strategic oil route.

Iran bombastic talk has some merit, having mine-laying and missile capability to wreak some damage to ships and seaman's lives, but the real candidate for disaster would be the environment, as a lot of oil would spill into waters at war. Iran could go down in history as causing the single largest environmental disaster even seen. If the oil spilled was substantial and stays mostly in the gulf, the mess could turn a seawater gulf into dead zone. The Persian Gulf doesn't seem to be as deep or robust or is as large as the Gulf of Mexico.

The Strait of Hormuz is 21 miles (34 km) wide at its narrowest point. That's a pretty good-sized area when considering battle plan damage; it will take a lot of sunken ships to block a 21-mile hole. But at the same time, 21 miles is a really small battle area when dealing with missiles.

It will hardly matter, if the Iranians choose to take on the U.S. Fifth Fleet.  The fight won't last long, after the first shot by the Iranians the U.S. Navy will be deciding the course of battle, if the U.S. President can see to supporting them properly. It could, if the world community gets its act together be the tipping point to set the Iranian people free of the religious zealots and make the whole world a safer place.

People tend to forget the destructive power of an organized, trained and well equipped military force. The past two decades has seen U.S. power become more accurate and effective at disabling counter forces. The U.S has gotten very good at making sure the other guys die for their country - futilely.

And it will be futile. Because also on Wednesday Saudi Arabia said it will offset any loss of oil from a threatened Iranian blockade of the crucial tanker route through the Strait. Add to that the news that Iraq is up to shipping 3 million barrels a day and Libya is back to shipping 1 million more barrels each day. Not only can starting a fight be extremely dangerous to the Iranian regime's existence, the benefits are already taken off the table.

The Saudi oil ministry official didn't specify other routes that could be used to transport oil.  There aren't a lot of options.

The question is how long will it take for the U.S. fleet to clear the sea of combatants.

The idea to start a fight also would have other serious consequences.  The Iranians could lose political support from China and Russia.  Then there is the money; oil provides half of Iran's revenue and last year that amounted to about $73 billion.

Is it all a tempest of words? Maybe. Just keep in mind the total behaviors of those who do the speaking. That's enough to cause concern.

By. Brian Westenhaus

Source: Iran Could Be an Oil Price and Environmental Threat