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Iran's Supreme Leader Threatens to Halt Gulf Oil Exports

Iran's Supreme Leader Ayatollah Khamenei resurrected an old threat from the 1980s. He said Iran would cut off all oil exports from the Persian Gulf region if their own exports were halted by sanctions.

Iran sits astride the Straits of Hormuz -- a choke point through which all Gulf shipping must pass. They have threatened to close the straits numerous times over the last few decades.

Reuters:

Iran’s Supreme Leader Ayatollah Ali Khamenei on Saturday backed President Hassan Rouhani’s suggestion that Iran may block Gulf oil exports if its own exports are stopped and said negotiations with the United States would be an “obvious mistake”.

Rouhani’s apparent threat earlier this month to disrupt oil shipments from neighboring countries came in reaction to looming U.S. sanctions and efforts by Washington to force all countries to stop buying Iranian oil.

“(Khamenei) said remarks by the president ... that ‘if Iran’s oil is not exported, no regional country’s oil will be exported,’ were important remarks that reflect the policy and the approach of (Iran’s) system,” Khamenei’s official website said.

Iranian officials have in the past threatened to block the Strait of Hormuz, a major oil shipping route, in retaliation for any hostile U.S. action.

Khamenei used a speech to foreign ministry officials on Saturday to reject any renewed talks with the United States after President Donald Trump’s decision to withdraw from a 2015 international deal over Iran’s nuclear program.

“The word and even the signature of the Americans cannot be relied upon, so negotiations with America are of no avail,” Khamenei said.

It would be an “obvious mistake” to negotiate with the United States as Washington was unreliable, Khamenei added, according to his website.

Iran's navy is nowhere near strong enough to block the straits. They would have to rely on mining the waters which could be easily countered by a few U.S. minesweeping vessels we already have stationed in the region.

But mining the straits would cause insurance rates for vessels traveling through that vital choke point to skyrocket. It would definitely increase the price of gasoline and other petroleum products.

But unless Iran has a death wish, they won't do it. That's because it would hurt them as much as it would damage us.

Foreign Policy:

“Threats are easy to make,” said Anthony Cordesman, a defense analyst at the Center for Strategic and International Studies. But Iran’s naval strategy calls for deployment across the breadth of the Persian Gulf, not to bottle up vulnerable forces in a narrow body of water.

“People keep referring to ‘closing the strait.’ But we’ve got eight years of Iranian exercises that show that’s more an exercise in semantics, than the way Iran organizes to fight. Given the fact that it’s not particularly suicidal, concentrating its assets in the Strait of Hormuz makes no sense at all,” he said.

Is Iran "suicidal"? In this case, Khamenei appears to be more signaling his support for President Rouhani than making a serious threat. Nevertheless, while Iran's "blockade" of the straits might be futile, it would not come without cost to the U.S. and especially our allies. America's supply of oil would not be affected, but the price of oil on the international market would be. That would spell trouble for the U.S. economy at a politically sensitive time given the proximity to the midterm elections.