Iran appears to have attempted to raise the price of crude over the last 24 hours by threatening military activity to close the Strait of Hormuz to commercial shipping if new unilateral sanctions are placed on its oil exports - roughly 1/3rd of the World's oil shipments are routed through Hormuz so one might have expected the markets to react badly, there was a 2% peak rise in crude before the USN issued a statement saying "Meh.." now prices are the same as before Iran's gambit. 

 

So what it looks like to me is that Iran was hoping to play a bit of brinkmanship - raise the crude price and instil a bit of volatility to deter any additional sanctions - the problem is that the commodities markets and insurance industry seem to have limited faith in the Iranian capability to resist the USN for long, the greater risk is of course escalation, which also seems to be largely against Iranian interests. So what the hell are they playing at? They're going to have their bluff called in rapid order, do they risk appearing weak or giving the US (and Israel) a convenient pretext to intervene militarily.. 

 

Weird if you ask me, they haven't spooked the markets with their recent naval exercises nor with this unusually specific threat, so what comes next? Do they start the crap with their speedboats again or perform missile tests in the vicinity of the shipping lanes? Seems to me that this might be a sign of desperation on their part, and it should also make it very clear what it is likely to be like living in a world where they can make these threats backed up by nuclear warheads, however primitive. 

 

R

 

 

 

 

It does perhaps explain why OPEC for once is positive on increasing production, (Saudi Arabia) has also indicated it is willing to elevate levels of production in the near future.

 

google.com/hostednews/ap/artic... 

 

Just to clarify, the sanctions (due to be signed imminently) aren't on oil itself but on companies and banks trading with Iran's central bank, which results in a similar outcome for Iranian oil in that it is excluded from much of the international market - there's also been rumours that bank runs inside Iran are becoming a real possibility, which might explain the panic, perhaps the economic situation is as bad as some of the dissenting reports suggest.  

 

Interesting, one does feel this whole situation is coming to a head, probably within the next 6 months.

 

R 

It didn't go well for them the last time they tried in 1988.  If anything they'd be lucky if we limited ourselves to just destroying their navy again which we would certainly do.

 

Remember this was before Desert Storm and the significant basing of US forces within the region and the stand up of 5th fleet, located in the Persian Gulf now for 20 years.

 

We should be far more clear in our capability to keep the straits open and further quietly telling Iran that manipulating the world's oil price is a form of economic warfare that we reserve the right to respond to in any terms we see fit.  We don't need to be overt about it either.

Unfortunately, we have a president who acts in the interests of fringe elements but does not necessarily act in the best interests of the whole country.

 

He could easily reason that higher prices at the pump are helpful for advancing his agenda.

As predicted: 

Iran has denied reports by state media that it test-fired long-range missiles during military exercises in the Gulf.

"The exercise of launching missiles will be carried out in the coming days," Iran's senior navy commander is quoted as telling Iran's Press TV. 

 

bbc.co.uk/news/world-middle-ea... 

 

 

Maybe Iran is only trying create doubts about the future availability of Persian Gulf crude oil and does not actually want to close the straits.

 

I wonder if the oil producing states there are considering installing pipelines for transferring crude to terminals on the Gulf of Oman.