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Page added on November 26, 2012

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Iran Positioned to Threaten Oil Lanes

Public Policy

In mid-December, the U.S. military will have only one aircraft carrier positioned in the Persian Gulf region for the first time in two years. At the same time, the Iranian navy said it was kicking off a 10-day exercise in the region. Oil prices spiked when Iran early this year threatened to close oil-shipping lanes in the region. If talks scheduled for December between Tehran and the IAEA turn sour, there exists for Iran the potential to exploit the security vacuum in the region and use its defensive position for geopolitical gain.

The U.S. Navy announced that, for about two months, there will be only one aircraft carrier based in the Middle East region because of unexpected repair work needed on USS Nimitz.  A Navy commander said it was the “right thing to do” to leave the military one carrier short in the region, a first since December 2010. At the same time, the Iranian navy announced plans to conduct a 10-day drill to display what Tehran said was a way for the Islamic republic to “display its might and deterrence power.”

In January, oil prices were moving fast beyond the $100 per barrel mark in part because of tensions with Iran, which had threatened to shut down the Strait of Hormuz in response to increased sanctions pressure. The U.S. Energy Department describes the strait as the “world’s most important oil checkpoint.” Last year, about 17 million barrels oil per day traveled through the area, which represented about 35 percent of the world’s maritime oil shipments. Iraq, Saudi Arabia and the United Arab Emirates have pipelines in place to compensate for any closure, though each of those has their limitations.

Traders in January said tensions in the region would certainly lead to an increase in oil prices. While much of Iran’s oil heads to Asian economies, the oil market is global, meaning U.S. economic power is linked critically to U.S. defensive power in the Middle East. U.S. Energy Department analysts said any economic uncertainty in the oil markets would have a ripple effect on the global economy.

Iran and delegates from the International Atomic Energy Agency are set to resume negotiations Dec. 13. IAEA Director General Yukiya Amano has said there’s “lots” of activity at the Parchin military complex near Tehran. Western diplomats have said they suspect Iran has taken steps to shield what could be illicit nuclear activity at the site. Tehran has said it was opposed to weapons of mass destruction, though Western diplomats have already said they expect few breakthroughs during next month’s talks.

Iran could take advantage of the U.S. Navy’s brief drawdown in the region to rattle its sabers in the gulf should the IAEA issue a damning nuclear assessment following December talks. With Iran’s economy in decline, however, any decision to shut down the Strait of Hormuz could work against, not for, Tehran’s favor. Nevertheless, the mere threat of a closure in January was in part responsible for a one-day 4.25 price increase for oil. Iran’s naval drills are scheduled to get under way about a week after the IAEA talks.  Without a major U.S. defensive bulwark, the Iranians may have the deck stacked in their fav

OilPrice.com



7 Comments on "Iran Positioned to Threaten Oil Lanes"

  1. actioncjackson on Mon, 26th Nov 2012 4:44 pm 

    The US has been meddling (to put it lightly) in Iranian affairs for over sixty years, seemingly with one ultimate purpose, oil motivated imperialism. The US only gets involved in the affairs of foreign countries when there are favorable incentives, a national policy. I wouldn’t be surprised if the US is applying their usual tactics, WMD propaganda (whether true or not) and purposeful sacrifice of a chess piece to ignite civilian support and validate a full frontal confrontation for the purpose of installing a friendly proxy government. Only now it’s a question if the US public majority can be duped again in the light of increased political awareness due in part to the questionable events on 9/11 and the more recent fiscal crises.

  2. MrEnergyCzar on Mon, 26th Nov 2012 6:34 pm 

    One of their fighter jets can happen to run into one of ours…..

    MrEnergyCzar

  3. Newfie on Mon, 26th Nov 2012 7:38 pm 

    Aircraft carriers make nice targets for ship missiles.

  4. rollin on Mon, 26th Nov 2012 11:10 pm 

    So the Iranians can shift the oil price by 4 percent without going to war. Will we even notice that kind of shift at the gas pumps when it normally swings 15 percent? Probably would be hidden in the noise if the media did not hype such things.

  5. BillT on Tue, 27th Nov 2012 1:49 am 

    Rollin, it will shift to rationing and maybe $10+ gas if a real war breaks out in the Middle East. When Iran has nothing to lose, the Straights will be closed and the pipelines out of the area will be destroyed. You can count on it. It is the logical way to go. The US cannot exist for more than 90 days without oil from that region. Russia could threaten to cut off the oil and natural gas to Europe just as winter sets in and force NATO to back off. Many possibilities if there is a war in oil country. Many possibilities.

  6. Arthur on Wed, 28th Nov 2012 10:28 am 

    “Only now it’s a question if the US public majority can be duped again in the light of increased political awareness due in part to the questionable events on 9/11 and the more recent fiscal crises.”

    I am not sure if it is a matter of the American public being duped… I am afraid that by and large US policy is supported by the majority of the population. There have been two major outcries of public protest as far as I can remember: the Vietnam demonstrations and OWS. Vietnam was because too many American kids were dying for a hopeless cause and OWS was a protest against declining living standards of the middle class. In general the imperial policies of Washington are NOT questioned by the US population, except for fringe groups like libertarians, white nationalists and Nation of Islam. Even the low taxes proponents of the Teaparty support empire. The only thing the US government needs to do is engineer another Maine incident, Lusitania, Pearl Harbor, Gulf of Tonkin or 9/11 and the hysterical public will shout ‘go nukem’. The only reason Iran has not been attacked yet was because Iran has avoided confrontation. But it takes one Israeli torpedo sinking the Nimitz to get WW3 started. The point is how to convincingly blame Iran, which is not easy in the internet era.

  7. SOS on Wed, 28th Nov 2012 12:32 pm 

    The politics of scarcity begun under the Jimmy carter admin -production graphs clearly show the politically caused decline – forced the USA to seek oil elsewhere. We went to the middle east and the result is what you see happening there today.

    Propaganda has the collective you believing we are running out and the collective anger is redirected through media and politics at red herrings like hummers and global warming. With the news there is actually more oil in the USA then we can use comes more propaganda, more anger and redirection of anger.

    It’s actually funny watching the manipulation of human beings as they gather to burn the libraries behind al gores leadership, but the fact remains the politics of shortage resulting in the political tool of peak oil is a crime against humanity causing untold suffering.

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