December 28, 2011 – Iran Threatens to Block The Strait of Hormuz: Iran issued a blunt warning on Tuesday, stating that it would block the Strait of Hormuz, the world’s most important oil transit point, if Western powers attempt to impose an embargo on Iranian petroleum exports in their campaign to isolate the country over its suspected nuclear energy program.
The warning, issued by Vice President Mohammad Reza Rahimi, came as Iran’s naval forces were in the midst of a 10-day war games exercise in a vast area of the Arabian Sea and Gulf of Oman. The Strait of Hormuz, a narrow passage that connects the Gulf of Oman to the Persian Gulf, is the route for one third of the world’s oil-tanker traffic.
“If Iran oil is banned not a single drop of oil will pass through Hormuz Strait,” Mr. Rahimi was quoted as saying by the official Islamic Republic News Agency at a conference in Tehran. “We are not interested in any hostility,” he said. “Our motto is friendship and brotherhood, but Westerners are not willing to abandon their plots.”
Mr. Rahimi appeared to be referring to efforts under way by the United States and European Union to restrict Iran’s ability to sell oil, its most important export, as part of their increasingly strict economic sanctions in response to Iran’s uranium enrichment program. Iran contends the program is purely peaceful but a United Nations report issued last month raised the possibility that it is clandestinely working on a nuclear weapon and missile delivery system.
European Union ministers have said they will take up the question over whether to boycott Iranian oil in coming weeks. The United States Congress passed a measure this month that could potentially choke off Iranian oil exports. Although the United States does not buy Iran’s oil, the measure could discourage other buyers, even those who have friendly relations with the U. S., by restricting their access to the American market if they do business with Iran’s Central Bank, the principal conduit for Iranian oil transactions.
Oil prices rose slightly, partly in reaction to Mr. Rahimi’s remarks. At the New York Mercantile Exchange, the benchmark contract was up 75 cents a barrel to $100. Iranian officials have predicted that oil prices would double if their exports are constricted.
Although the U.S. maintains a significant armada of warships near the Strait of Hormuz, the portion of the Strait that is navigable is extremely narrow and could be easily blocked. The narrow Strait is considered to be the most strategic strait of water on the planet. Through its waters, in giant ocean-going tankers, passes much of the oil from Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.
More than 75 percent of the Strait’s crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations.
According to the CIA World Fact book, China and India have the 3rd and 4th largest global economies; behind the European Union (#1) and the United States (#2). Any disruption of the Asian economic juggernaut would be an economic catastrophe of unimaginable proportions.
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