In response to the re-imposition of U.S. sanctions on the Islamic Republic, one of the top generals of its Revolutionary Guard Corps (IRGC) has threatened to blockade the Strait of Hormuz, which separates the Persian Gulf from the Gulf of Oman, which in turn leads into the Indian Ocean. Ariel Cohen explores the likely consequences should Tehran attempt to do so:
A recent oil-industry analysis shows that if Iran chose to cordon off the [strait], nearly 20 million barrels per day of crude oil—roughly 40 percent of global seaborne oil exports—would stop flowing from the [Persian] Gulf. The IRGC—the country’s premier military branch—has a myriad of options at its disposal to conduct a blockade. . . . Even a porous closure of the strait would prove effective, as global shipping insurers would refuse to protect any ship risking the journey. Iran may also target oil fields in Saudi Arabia, the United Arab Emirates, Kuwait, and other Gulf states, which would mean other producers, including Russia, would have to stand by and fill any deficit in the oil markets.
[Currently] Tehran plays an even more destabilizing role in regional conflicts in the Middle East than North Korea plays in the Asia-Pacific. . . . Iran also stands in violation of international law vis-à-vis its territorial waters. An Iranian law passed in 1993 requires that vessels identify themselves before exercising innocent passage through its shared portion of the Gulf—in violation of the United Nations Convention on the Law of the Sea. Threats of closing the Strait of Hormuz are just the most recent illustration of Iran’s subversive behavior. . . .
Tehran cannot, however, dominate the entire Gulf and it is unable to target traffic with guided weapons without evoking an overwhelming reaction by the U.S. and the UK, which are much more significant naval powers than Iran. Furthermore, . . . if Iran shoots missiles at U.S. forces in the Middle East or those of American allies, . . . President Trump would have to decide whether to eliminate Iran’s aerial defenses, ballistic-missile systems, and air force, as well as its nuclear infrastructure. Plans to do so have been in Pentagon drawers since the hostage crisis in 1979 under Jimmy Carter.
The mullahs would be wise to support the free shipping of oil and the healthy global economy, and not risk a potentially catastrophic confrontation they have no hope to survive.
Read more on Forbes: https://www.forbes.com/sites/arielcohen/2018/07/26/can-iran-crash-oil-markets-by-blockading-the-strait-of-hormuz