Guest Post: Iran & the Strait of Hormuz: Bad Bluff or Good Gamble?

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Submitted by Peter Beutel of Cameron Hanover

Iran & the Strait of Hormuz: Bad Bluff or Good Gamble?

Was Iran born to bluff, or is it really much closer to building a nuclear weapon than anyone really knows? Now that the Islamic Republic has made its intentions clear, one has to assume that it has given away a certain measure of strategic surprise. If it really wants to get the most that it could – militarily – from an attack on tankers moving through Hormuz, it should have never even raised it as a possibility. By discussing it, we figure Iran has given the US “notice” that it might not have had in the event of an attack from the blue. Weren’t the maneuvers in the Straits (by Iran) enough to raise the question without raising alert conditions from the West and from Israel?

Why would Iran make the threat to attack Hormuz when it seemingly cannot gain maximum military strategic advantage from it? Surely, it knows that the US and Saudi Arabia cannot allow the Strait of Hormuz to be closed, even briefly. Was it just testing market responses? Did it want to shake a couple European countries loose from the EU position on sanctions – or was it just looking for a few extra million from higher oil prices? Any one or more of those could be the case, and there is one more possibility. Iran may actually be closer to developing a nuclear weapon than we believe to be the case. If it did, it could make a closure of Hormuz ‘stick.’ In any event, Teheran seems more aggressive than really makes much sense.

With Iran producing 3.575 million bpd at last count, a $4.00/bbl jump in prices is worth $100 million over the course of a week. That is a lot of pistachios (Iran’s number two export). What has changed in the last few weeks is glaring: Iran is acting like the US well after the War of 1812, when it embraced the Monroe Doctrine (1823). Iran is saying basically the same thing – that any interference in the Petroleum Gulf is within Iran’s realm of interest, but clearly not in others’ realms of interest. It has told the US that any redeployment of naval units beyond the Straits of Hormuz will be taken as acts of war. This is as far-reaching a new doctrine as the Monroe Doctrine was in its day, or as the threat to close Hormuz in the event of European adoption of new sanctions. There is one set of glaring differences, though.

The US, in 1823, faced a Europe drained by 23 years of on-and-off fighting from the French Revolution through Waterloo (1815). England and France had been driven to the precipice of economic ruin by the wars – which could also be true of the US and EU now (by various other factors, wears among them). Bt, England and France were done looking for new Atlantic colonies and the US knew that it could proclaim the Monroe Doctrine without it being immediately tested. Iran may feel that it has the financial plight of the EU and US on its side, but it surely knows that the US will be bringing a carrier group to the PG next week or next month. It will not wait until next year. Iran knows this.

Iran also knows that the EU is on the brink of accepting new sanctions against Teheran. China has opposed new sanctions undertaken by the US as being “unilateral” sanctions adopted by Washington, but the unilateral aspect comes only in the timing. European countries are considering – and have been for two weeks – new sanctions against Teheran. The new sanctions force companies to choose between doing business with Teheran or Washington. As of this writing, EU governments seem to be moving nearer to halting oil purchases from Iran. Any new positions taken against Iranian banking will be announced on January 30th at a meeting of EU foreign ministers. Earlier today, Greece agreed to go along with the larger European Union on any decision to boycott Iranian oil. Everything from tighter banking conditions to a total embargo – with tightened banking conditions – is on the table. A number of new sanctions seem certain.

And, that brings us back to Iran’s new Doctrine, which we hesitate to further connect to US President Monroe. When he announced his doctrine, he was not entirely sure it would stick. But, he thought he had good odds. Iran’s leaders must certainly know that the odds are heavily stacked against them. Either new sanctions or the return of US carrier groups to the Petroleum Gulf – or both – are likely.

So, Iran already has a nuclear device already or it wants to drive up oil prices as it possibly increases its bid to lead the anti-American group in the region. That latter one is a non-starter because of the ethnic Persian versus Arab component. So, what can it reasonably expect to achieve? Is this all for domestic consumption? Does it seriously plan on starting a hot war, or will it take the extra money on higher oil prices and walk away.

One thing is certain. If Iran does ever have a nuclear weapon, it looks likely that it will use it. The new Gulf Exclusion Doctrine cannot be allowed to stand. It has to be tested.  But, Iran really looks like it wants the doctrine to stand … at some point.  It seems to need a nuclear deterrent, though, first, to make it stick.  As far as we know, it has the cart before the horse on that, though … right now.