“This can be read as a success for Tehran,” said Behnam Ben Taleblu, an Iran-focused research fellow at the Foundation for Defense of Democracies in Washington, D.C.
The Houthi strikes, and Soleimani’s direct reference to the Bab el-Mandeb on Thursday, “is a signal that Tehran has options for escalation.”
Bab el-Mandeb sees about 5 million barrels per day (bpd) of oil, which is small compared to the 17 million that passes through the Strait of Hormuz, on the opposite side of the Arabian Peninsula. Hormuz sits on the peninsula’s eastern flank, and is the only sea passage from the Persian Gulf to the open ocean.
But the fear here, said RBC Capital Markets’ Helima Croft, head of global commodity strategy, is that increased Houthi rebel attacks on tankers heightens the chance that one will actually be sunk.
In that event, the U.S. “could be forced to become more actively engaged in ensuring maritime security, like during the tanker wars,” of the Iran-Iraq war, Croft said, referencing an incident in 1988 where the U.S. came into direct conflict with Iran after Iranian sea mines blew up part of an American missile frigate. The U.S., which supported Saddam Hussein in the Iran-Iraq war, subsequently destroyed roughly half of Iran’s naval facilities.
A crisis in the Bab el-Mandeb would trigger greater fears over incidents in Hormuz and send oil prices upward. And while it would be difficult for Iran to close the Straits for a prolonged period, “it could carry off one-off attacks on vessels,” she warned.
Lashing out ahead of oil sanctions deadline
The escalation comes as the U.S. prepares to reimpose sanctions on Iran as part of its withdrawal from the seven-nation JCPOA (Joint Comprehensive Plan of Action), the deal that allowed economic relief for Iran in exchange for curbs on its nuclear program.
The Trump administration, through use of secondary sanctions, has mandated that all countries wind their imports of Iranian crude down to zero by November 4, in addition to deploying sanctions on a range of other products and financial activities.
“It is no accident that as U.S. sanctions are about to be levied and enforced, Iran is lashing out,” Ben Taleblu said.
The regime in Tehran has threatened that if it is unable to trade its oil, other countries will be stopped as well, citing its willingness to close the Strait of Hormuz, through which some 30 percent of the world’s oil shipments pass.
While this is unlikely to succeed given the presence of the U.S. Navy’s Fifth Fleet in Bahrain, Iran can up its direct harassment of U.S. vessels in the Gulf with IRGC speedboats and drones, activity that had largely stopped since mid-2017, according to Pentagon officials.
And its expected increase in support for regional proxies — which is exactly the behavior the U.S. seeks to deter — will likely incur yet more sanctions.
Cloggie on Mon, 30th Jul 2018 3:48 pm
You cherry picked recession years, and then cherry picked non recession years later..
I did exactly what you did, albeit with opposite intentions, you hillbilly bumpkin.
MASTERMIND on Mon, 30th Jul 2018 4:00 pm
Clogg
I used all non recession years and worked my way from the top to the bottom..and I showed you a chart that shows the five year averages..
You have to lie because you are too weak minded to handle the truth..
MASTERMIND on Mon, 30th Jul 2018 4:03 pm
Europe Economic Growth (GDP)
1973 5.4 %
1989 3.3%
2001 2%
2016 1.6%
2028 0% = Economic Collapse
Source: Harvard
Political Instability and Economic Growth – (Alesina, 1996) Journal of Economic Growth
https://www.scribd.com/document/384373317/Political-Instability-and-Economic-Growth-Alesina-1996
Source: World Bank
https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locati&locations=EU
And when the global oil shortage hits..its game over..And US Russia and china will rule the world..Bye bye Europe and the UK..you are no longer needed..lol
Cloggie on Mon, 30th Jul 2018 4:09 pm
And US Russia and china will rule the world.
Moving the goal posts, are we?
First Americans were about to eat their own children and now they’re going to rule the world, with the US and China.LOL
Make up your mind, idiot.
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