Iran?s war games could force U.S. to ?respond aggressively'

[Skippy00004]

http://fullcomment.nationalpost.com/2011/12/22/peter-goodspeed-irans-currency-collapse-prompts-fear-of-oil-blockade/

Iran?s nuclear push is rapidly turning into a game of chicken with the world?s economy.

Faced with the threat of growing international sanctions and unprecedented economic uncertainty that has seen the value of its currency halved in recent weeks, Iran announced Thursday its navy will stage a 10-day exercise in the Strait of Hormuz, starting Saturday.

The move, which increases the risk of military confrontation with the United States, has the potential to temporarily choke off oil exports from the Middle East, drive up international energy prices and damage the global economy.

Admiral Habibollah Sayyari, head of Iran?s navy, said submarines, destroyers, missile-launching ships and attack boats will occupy a 2,000-kilometre stretch of sea from the Strait of Hormuz, at the mouth of the Persian Gulf, to the Gulf of Aden, near the entrance to the Red Sea.


?Iran?s military and Revolutionary Guards can close the Strait of Hormuz. But such a decision should be made by top establishment leaders,? he said.

This month, Parviz Sarvari, a member of the Iranian parliament?s National Security Committee, said Iran would close the Strait of Hormuz as part of a military exercise.

?If the world wants to make the region insecure, we will make the world insecure,? he said.



In November, Iran?s energy minister told Al Jazeera television Tehran could use oil as a political tool in the event of future conflict over its nuclear program.

Dubbed Velayat-90 (Velayat is Persian for supremacy), the war games are designed to display Iran?s naval power in the face of growing international criticism of its nuclear work.

This week, Leon Panetta, the U.S. Defence Secretary, predicted Iran will be able to assemble a nuclear bomb within a year and warned the United States had not ruled out using military force to prevent that from happening.

The day before Iran announced the war games, General Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, told CNN television the U.S. was determined to prevent Iran from becoming a nuclear power.

?My biggest worry is they will miscalculate our resolve,? he said. ?Any miscalculation could mean that we are drawn into conflict and that would be a tragedy for the region and the world.?

Iran said the war games would be held in international waters.

The Strait is a 50-kilometre wide passageway through which about a third of the world?s oil tanker traffic sails. Whoever controls this crucial choke-point virtually controls Middle East oil exports.

?The importance of this waterway to both American military and economic interests is difficult to overstate,? said a report by geopolitical analysts at the global intelligence firm Stratfor.

?Considering Washington?s more general ? and fundamental ? interest in securing freedom of the seas, the U.S. Navy would almost be forced to respond aggressively to any attempt to close the Strait of Hormuz.?

?Iran has built up a large mix of unconventional forces in the Gulf that can challenge its neighbours in a wide variety of asymmetric wars, including low-level wars of attrition,? said Anthony Cordesman of the Center for Strategic & International Studies in Washington.

This includes nearly 200 missile patrol boats, equipped with sea-skimming anti-ship missiles, which ?can be used to harass civil shipping and tankers, and offshore facilities, as well as attack naval vessels,? he said.

?These light naval forces have special importance because of their potential ability to threaten oil and shipping traffic in the Gulf and the Gulf of Oman, raid key offshore facilities and conduct raids on targets on the Gulf Coast.?

But Mr. Cordesman also warned ?Iran could not ?close the Gulf? for more than a few days to two weeks even if it was willing to sacrifice all of these assets, suffer massive retaliation, and potentially lose many of its own oil facilities and export revenues.?

?It would almost certainly lose far more than it gained from such a ?war,? but nations often fail to act as rational bargainers in a crisis, particularly if attacked or if their regimes are threatened,? Mr. Cordesman wrote in a report titled Iran, Oil, and the Strait of Hormuz.

Closing the Strait for just 30 days would send the price of crude racing up to US$300 to $500 a barrel, a level that would trigger global economic instability and cost the U.S. nearly US$75-billion in economic activity.


REUTERS/Hamed Jafarnejad/Fars News
Iran's Navy Commander Habibulah Sayari announces 10 days of war games will be held in the Strait of Hormuz
?One bomb on Iran and oil prices could shoot up to $300 or even $500 a barrel,? veteran UPI correspondent Arnaud de Borchgrave wrote recently.

According to a computerized war game carried out by the Heritage Foundation in Washington in 2007, the effects of an Iranian attempt to block Gulf oil shipping may be minimal because the U.S. and its allies would immediately send military and naval forces to protect shipping lanes.

If Iran destroyed oil tankers or impeded the transit of oil and other commerce, it could expect to suffer considerable damage in retaliatory attacks, the study said.

The potential for a naval confrontation comes just as the U.S. and its allies are stepping up pressure to impose even stricter economic sanctions against Iran in an effort to force it to abandon its controversial nuclear program.

This follows the introduction of stronger economic sanctions by the U.S. and Europe after a International Atomic Energy Agency report issued in November increased fears Iran is working to develop atomic bomb capability.

Sanctions appear to be hurting Iran, squeezing its banks and sending the Iranian rial plunging to its lowest level against the U.S. dollar.

Washington recently declared Iranian banks guilty of money laundering, forcing U.S. banks to step up the reporting requirements of any banks they deal with who may be doing business with Iran.

This has made it so difficult for foreign businesses many have decided to stop dealing with the Iranians.

In November, Canada and Britain also decided to sever all ties with the Central Bank of Iran and France began calling for a European Union boycott of Iranian oil.

Last week, Issa Jafari, an Iranian parliamentarian, said, ?If oil sanctions are imposed on Iran, we will not allow even a single barrel of oil to be exported to countries hostile to us.?

In the past, Iranian officials have dismissed sanctions as doomed to fail, but this week Akbar Salehi, the Foreign Minister, told the official Islamic Republic New Agency, ?We cannot pretend the sanctions are not having an effect.?

Mahmoud Bahmani, governor of the Central Bank of Iran, also said Iran needs to act as if it were ?under siege.?

[Colombo]

It's actually much simpler for iran to destroy the world economy than the government mouthpieces are implying, A simple and cheap mining of the straights with a simultaneous mining or the simple sinking of a few ships by rpg attack in the suez by iranian agents already in place in the egyptian faction of the muslim brotherhood will almost totally stop oil flow. This is and has known by both sides for some time now. I personally think our current administration may have an interest in keeping such a disaster from going to waste. Get ready to load em and stack em deep.