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After threatening only days ago to close the Strait of Hormuz, through which twenty percent of the world’s oil supplies moves, the Iranian government has once again engaged in ominous sabre-rattling.
The mullah regime’s latest threat involves a warning to the United States on Tuesday not to send its naval task force group, headed by the aircraft carrier USS John C. Stennis, back to the Persian Gulf. The Stennis had already left Gulf waters last week en route to the Afghan war theater and is now “somewhere between Oman and Pakistan.”
“I advise, recommend and warn them [the Americans] over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once,” Iranian Army Chief Ataollah Salehi reportedly stated.
The reason for Iran’s latest bellicose outburst is that the Obama administration is implementing a strict set of sanctions that could seriously damage, even topple, the Iranian government. The latest punitive measures are being imposed because Iran is still refusing, despite worldwide condemnation, to give up its nuclear weapons program. The fact Iran may be as little as a year away from developing its first nuclear weapon accounts for the sanctions’ severity. The International Atomic Energy Commission also reported recently that Iranian scientists are “working to design a nuclear warhead.”
Iran’s rulers have survived previous sanction attempts to halt their nuclear program because Iran is the fourth-largest energy exporter in the world. Its sales of oil and gas, which comprise the country’s largest exports, have allowed the Iranian government to maintain the enormous state subsidy system that has, more or less, maintained social peace in the country. There have been anti-government demonstrations in Iran, but they have failed to develop into “Arab Spring”-like movements that have brought about regime change in countries like Egypt and Tunisia.
But the latest restrictions were constructed to target those all-important oil revenues, the mullah regime’s life blood. In the future, countries that buy Iranian oil will not be allowed to “conduct financial transactions in the United States.” Governments who continue to do so would thus be excluded from a major part of the world’s financial system. In essence, what these new sanctions amount to is an embargo on Iranian oil.
It is obviously believed a US-induced boycott of Iranian oil will cause such economic havoc in Iran that the mullahs will give up their nuclear ambitions and “come back into compliance with its international obligations.” What is left unspoken, however, is that it is most likely hoped the ensuing economic disruption after the sanctions begin to bite will lead to the mullahs’ undoing. It was in response to this embargoing of its oil that the Iranian government issued its first threat to close the Strait of Hormuz. Iran’s vice president stated “even one drop of oil” will not pass through the strait if Iran’s oil exports were affected.
But as with all plans, there are also setbacks. A major concern regarding the latest sanctions is that it is “unclear” whether there will be enough alternative sources of oil to make up for the expected reduction in Iranian exports. A second problem is that oil prices would also certainly rise at a time when many countries are in recession. And while Western nations are expected to co-operate with the boycott, China, which imports a lot of its oil from Iran, will definitely be more problematic.
“The only strategy that is going to work here is one where you get the cooperation of oil buyers,” said one analyst in the New York Times. “You could imagine the Europeans, the Japanese, and the South Koreans cooperating, and then China would suck up all of the oil that was initially going to everyone else.”
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