December 29, 2011
Below are articles selected regarding the potential closing of the Straight of Hormuz. The sources of these articles range from Conservative to Liberal in political leanings. By compiling different views on the same subject matter, a proposed plan of action is made. Readers, what are your opinions?
KEY EEXCERPTS FROM THE BLAZE/AP- IRAN: CLOSING THE STRAIGHTS OF HORMUZ POSTED ON DECEMBER 28, 2011 BY BUCK SEXTON
The U.S. Congress has passed a bill banning dealings with the Iran Central Bank, and President Barack Obama has said he will sign it despite his misgivings. Critics warn it could impose hardships on U.S. allies and drive up oil prices. The bill could impose penalties on foreign firms that do business with Iran’s central bank European and Asian nations import Iranian oil and use its central bank for the transactions. A closure of the strait could temporarily cut off some oil supplies and force shippers to take longer, more expensive routes that would drive oil prices higher. It also potentially opens the door for a military confrontation that would further rattle global oil markets.
KEY EXCERPTS FROM THINK PROGRESS- U.N. AMB. RICE: FULL IMPLEMENTATION OF SANCTIONS TO COMBAT IRAN’S NUCLEAR PROGRESS, DIPLOMATIC RESOLUTION OF CRISIS BY ALI GHARIB, DECEMBER 21, 2011
The U.S. Permanent Representative to the United Nations Ambassador Susan Rice expressed strongly-worded concern about recent developments in Iran’s nuclear program.In her remarks, Rice raised the two issues as a call to international action: The start of enrichment at Qom will serve as yet another illustration of Iran’s flagrant disregard for the Council’s very clear position on Iran’s enrichment activities. …The Council therefore must redouble its efforts to implement the sanctions already imposed. Full implementation of these measures will show Iran there is a price to be paid for its deception. Full implementation can also slow down Iran’s nuclear progress, buying us more time to resolve this crisis through diplomatic means.
KEY EXCERPTS FROM DRUDGE REPORT/ REUTERS- U.S. FIFTH FLEET SAYS WON’T ALLOW HORMUZ DISRUPTION BY PARISA HAFEZI AND HUMEYRA PAMUK TEHRAN/DUBAI, DECEMBER 28, 2011
“Closing the Strait of Hormuz for Iran’s armed forces is really easy … or as Iranians say, it will be easier than drinking a glass of water,” Iran’s navy chief Habibollah Sayyari told Iran’s English-language Press TV on Wednesday. About 40 percent of all traded oil leaves the Gulf region through the strategic waterway. Iranian officials have shown no sign of willingness to compromise. As a result, he said, “Iranian officials are showing their teeth to prevent a military strike.” Closing the Strait of Hormuz would harm Iran’s economy, undermining the Iranian leadership ahead of a parliamentary election in March.
KEY EXCERPTS FROM MOTHER JONES- WHAT HAPPENED TO OBAMA’S NUCLEAR OPTION? IN A SHOWDOWN OVER HOW TO DEAL WITH IRAN, IT APPEARS THAT THE PRESIDENT HAS BOWED TO CONGRESS. BY HAMED ALEAZIZ, DECEMBER 16, 2011
Robin Mills, an energy expert and columnist at The National, says, “If the sanctions were successful in substantially reducing Iranian oil exports, then world oil prices would rise significantly—but panic might take prices [even] higher.” The Wall Street Journal has reported that disrupting Iran’s oil exports could increase gas in the US by as “much as $1 more a gallon, even though the U.S. doesn’t import any Iranian oil.” And higher gas prices could damage the nation’s already gloomy economic outlook.The sanctions could also prove disastrous for the Iranian people, says Marashi, who suggests they could eventually devastate the Iranian population similar to the way in which Iraqi people suffered under harsh measures against Saddam Hussein.
KEY EXCERPTS FROM BLOOMBERG- CLOSING THE STRAIGHT OF HORMUZ MIGHT BE A SELF INFLICTED WOUND FOR IRAN BY PETER S. GREEN AND MARK SHENK, DECEMBER 28,2011
Although it would be relatively easy forIran to make good on threats to close the strategic waterway that links the Persian Gulf and the Arabian Sea, doing so might hurt Iran more than any other country. Impact on Iran- Were Iran to make such a move, it might be hurt more than its adversaries. Iran’s economy is shaky, as is popular support for its clerical rulers, Nader said. The country is facing new Western efforts to halt its suspected nuclear weapons program, including U.S. sanctions that are awaiting President Barack Obama’s signature and a possible European Union ban on imports of Iranian oil. Iran’s Best Customer- Moreover, according to the EIA, Iran’s best customer isChina, which took about 22 percent of Tehran’s oil exports during the first half of this year and is a member of the United Nations Security Council and one of the few nations on friendly terms with the Islamic Republic. China gets 11 percent of its crude oil imports from Iran, according to the EIA, while Turkey, a NATO member that shares both a border and antipathy toward Kurdish separatist groups with Iran, got 51 percent of its imported crude oil from the Islamic Republic of Iran. While closing the Strait of Hormuz, even briefly, would hurt Saudi Arabia, Iraq and other Gulf oil exporters, the Saudis also ship oil via the Red Sea.
The whole world is affected by fluctuation in the price of oil due to the threat of a nuclear Iran, and Iranian war games and posturing in the Straight of Hormuz. While financial markets and the price of oil would be threatened by the Straights of Hormuz being blockaded, there are strategic steps that can be taken to counter the consequences of an Iranian blockade. Below are some strategic choices that can be made in response to Iran:
1) Call Iran’s bluff by allowing them to blockade the Straight of Hormuz.
2) Announce an initiative to encourage more licensing of drill permits on a large scale in the United States.
3) Announce approval of the new oil pipeline which is supposed to run from Canada to Oklahoma.
4) Aid in the transport of Saudi oil through the Red Sea.
5) Forge a new trade relationship with the Chinese, selling them American oil at bargain prices to replace the trade slowdown if the Iranians blockade the Straight of Hormuz.
6)Beef up spy satellite info as events play out. Let the Iranians reveal their military playbook.
7) Encourage Saudi Arabia to beef up their supply of refined oil.
8) Encourage a movement to have Iran kicked out of Opec if it persists in blockading the Straight of Hormuz.