From Bloomberg
Iran will stop oil exports from the Strait of Hormuz, the world’s most important oil chokepoint, if the U.S. succeeds in halting crude sales from the Persian Gulf nation, a Revolutionary Guards official said.
“Any hostile attempt by the U.S. will be followed by an exorbitant cost for them,” said Esmail Kowsari, deputy commander of the Sarollah Revolutionary Guards base in Tehran, according to the Young Journalists Club, affiliated with Iran’s national broadcaster. “If Iran’s oil exports are to be prevented, we will not give permission for oil to be exported to the world through the Strait of Hormuz.”
The Strait of Hormuz is at the mouth of the Persian Gulf, the world’s biggest concentration of tankers that carry about 30 percent of all seaborne-traded crude oil and other liquids during the year. President Donald Trump decided in May to back out of the 2015 nuclear accord with Iran, with sanctions set to be renewed in November. The U.S. threats come amid rising tensions, pitting Iran against Saudi Arabia and other Gulf Arab nations who maintain close ties with Trump.
Kowsari comments follow remarks by Brian Hook, the State Department’s director of policy planning, who said Monday that the U.S.’s “goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales.”
The U.S.’s threat recently to prevent Iranian oil exports “called for a swift and smart stance” from Iran, Kowsari said, praising Iranian President Hassan Rouhani’s reaction on Tuesday who said “it’s an incorrect belief that all oil producers would be able to export and Iran would be the only country unable to export oil.”
Rouhani’s comments “were a warning to regional countries,” said Masoud Goudarzi, a member of the Iranian parliament’s national security committee, according to the chamber’s news website. “In backing the U.S., countries in the Persian Gulf are pursuing interests that will harm the Islamic Republic and so won’t accept this.”
U.S. President Donald Trump has called for Saudi Arabia to boost production to make up for potential losses from Iran and Venezuela. The White House said over the weekend that King Salman bin Abdulaziz affirmed that Saudi Arabia has 2 million barrels a day of spare production capacity “which it will use if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality.”
Iran, OPEC’s third-biggest oil producer, exported 2.28 million barrels a day of crude in June, according to the Oil Ministry.
Strait of Hormuz: the world’s most important oil artery
From Reuters
With a third of the world’s sea-borne oil passing through it every day, the Strait of Hormuz is a strategic artery linking Middle East crude producers to key markets in Asia Pacific, Europe, North America and beyond.
This week, an Iranian Revolutionary Guards commander threatened that Tehran will block oil shipments through the waterway in response to U.S. calls to ban all Iranian oil exports.
The Strait has been at the heart of regional tensions for decades and this is not first time that Tehran has made such threats.
WHAT IS IT?
* It is a waterway separating Iran and Oman, connecting the Gulf to the Gulf of Oman and the Arabian Sea.
* It is 21 miles wide at its narrowest point, but the shipping lane is only two miles wide in either direction.
WHY IT MATTERS?
* The U.S. Energy Information Administration estimates a record 18.5 million barrels per day of sea-borne oil passed through it in 2016, a 9 percent increase on flows in 2015 which accounted for 30 pct of all sea-borne traded crude oil and other liquids during the year.
* Sea-borne crude and condensate flows transiting the Strait are estimated at around 17.2 million bpd in 2017 and around 17.4 million bpd in the first half of 2018, according to oil analytics firm Vortexa.
* Most of the crude exported from Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq passes through it. It is also the route for nearly all the liquefied natural gas (LNG) from lead exporter Qatar.
* Throughout the Iran-Iraq war (1980-1988) the two sides sought to disrupt each other’s oil exports in what was known as the Tanker War.
* The U.S. Fifth Fleet, based in Bahrain, is tasked with protecting the commercial ships in the area.
* Energy consultants Petromatrix who track U.S. aircraft carriers in the region say there are currently no carriers in the Arabian Gulf. They add the carrier that could have made the short trip to the Gulf from the eastern Mediterranean, turned around to sail back to the Atlantic.
* “Under the Bush administration there was always one to two carriers in the Arab Gulf, under the Obama administration there were some short times when the Arabian Gulf was left with no carriers but that was gestures made while the U.S. was negotiating with Iran,” they said on July 5
INCIDENTS IN THE STRAIT
* In July 1988 the U.S. warship Vincennes shot down an Iranian airliner, killing all 290 on-board, in what Washington said was an accident after crew mistook the plane for a fighter. Tehran called it a deliberate attack. The U.S. said the Vincennes was in the area to protect neutral vessels against Iranian navy attacks.
* In early 2008 the United States said Iranian boats had threatened its warships after they approached three U.S. naval ships in the Strait.
* In June 2008, Revolutionary Guards commander-in-chief, Mohammad Ali Jafari, said Iran would impose controls on shipping in the Strait if it was attacked.
* In July 2010 a Japanese oil tanker called M Star was attacked in the Strait. A militant group called Abdullah Azzam Brigades, which is linked to al Qaeda, claimed responsibility.
* In January 2012, Iran threatened to block the Strait in retaliation for U.S. and European sanctions that targeted its oil revenues in an attempt to stop the nuclear program.
* In May 2015, Iranian ships fired shots at a Singapore-flagged tanker which it said damaged an Iranian oil platform, causing the vessel to flee, and seized a container ship in the Strait.
* On July 3, 2018, President Hassan Rouhani hinted Iran could disrupt oil flows through the Strait in response to U.S. calls to bring down Iran’s oil exports to zero.
* The following day, a Revolutionary Guards commander spelled out that Iran would block all exports through the Strait if Iranian exports are stopped.
