Iran threatened to shut the crucial Strait of Hormuz shipping route if sanctions are leveled on its oil industry. Blocking the strait would choke off about a sixth of the world’s oil supply and dramatically excalate tensions with the rogue regime in Tehran. Basically i you cut off oil there are going to be some pissed off countries that are going to bomb your country #thatisall. Click below to read the story.
As tough-talk diplomacy played out,
Saudi Arabia and other Arab states have pledged to boost oil production in the event of a crisis. The offer alone eased crude oil prices on world markets.
Iran, which advocates the destruction of Israel, is under increasing pressure to abandon a nuclear program that could produce an atomic bomb.
Tehran anticipates Western sanctions targeting its oil industry, which generates 80% of the country’s cash.
As a result, Iran has mounted a massive, 10-day naval exercise outside the 34-mile wide strait linking Persian Gulf oil ports with the open sea.
“Closing the Strait of Hormuz is very easy for Iranian naval forces,” Iranian Navy Chief Adm. Habibollah Sayyari told state-run media. “Iran has comprehensive control over the strategic waterway.â€
The U.S. Navy responded Wednesday with a stern warning of its own.
The Bahrain-based U.S. 5th Fleet’s spokeswoman warned that any disruption at the strait “will not be tolerated.”
Lt. Rebecca Rebarich said the U.S. Navy is “always ready to counter malevolent actions to ensure freedom of navigation.”
The Iranian Navy’s last showdown with its U.S. counterpart ended badly for the Islamic Republic.
Limited fighting in 1987 and 1988 during U.S. escorts of Kuwaiti oil tankers through the gulf resulted in the sinking of an Iranian attack ship and frigate, and damage to others.
The U.S. also mistakenly downed an Iranian airliner it mistook for a fighter, killing all 290 on board.
President Obama is set sign legislation that would levy penalties on countries that do business with Iran’s national bank, which would further pinch Iranian exports, including its oil industry.
Benchmark crude fell 77 cents to $100.57 in New York early Wednesday, and 82 cents to 108.45 in London.
