29 December 2011

Iran threatens to block Strait of Hormuz oil route

Iran says it may close a vital oil-trade route if the West imposes more sanctions over its controversial nuclear programme

BBC News | 28 December 2011
Admiral Habibollah Sayari says Iran could easily close the Strait of Hormuz

Vice-President Mohammad Reza Rahimi warned that "not a drop of oil will pass through the Strait of Hormuz" if sanctions are widened.

Iran's navy chief Admiral Habibollah Sayari later said closing the strait would be "easy".

The US and its allies believe Iran is trying to develop a nuclear weapon.

Tehran insists its nuclear programme is for peaceful purposes.

Oil and finance

Western nations recently unveiled new sanctions against Tehran following a UN report that said Iran had carried out tests related to "development of a nuclear device".

Further measures being considered to target Iran's oil and financial sectors have brought a furious response from Tehran.

"The enemies will only drop their plots when we put them back in their place," Mr Rahimi was quoted as saying on Tuesday by the official news agency Irna.

Adm Sayari later told Iran's Press TV that closing the Strait of Hormuz would be "really easy" for Iran's armed forces "or as Iranians say, easier than drinking a glass of water".

"But right now, we don't need to shut it as we have the Sea of Oman under control, and we can control the transit," he added.


BOX: Q&A: Iran sanctions

Fresh sanctions have been agreed against Iran at a meeting of EU foreign ministers in Brussels, as international pressure on Iran over its nuclear programme intensifies.

What international sanctions are already in place on Iran?

The UN ratified four rounds of sanctions against Iran between 2006 and 2010 in reaction to its failure to halt uranium enrichment and co-operate with the International Atomic Energy Association (IAEA) over its nuclear programme. These sanctions include a ban on the supply of heavy weaponry and nuclear-related technology to Iran, a block on Iranian arms exports, and an asset freeze on key individuals and companies. Resolution 1929, passed in 2010, mandates cargo inspections to detect and stop Iran's acquisition of illicit materials.

The EU has imposed its own restrictions on trade in equipment which could be used for uranium enrichment and has put in place an asset freeze on a list of individuals and organisations which it believes are helping advance the country's nuclear programme, and has banned the individuals on the list from entering the EU. On 1 December, the EU added 39 people and 141 companies to the list, although it has not yet named them.

Last year the EU also banned the export to Iran of key equipment and technology for the refining and production of natural gas, in an attempt to hit the crucial energy sector of the Iranian economy.

Which countries have imposed bilateral sanctions on Iran?

The US has longstanding comprehensive sanctions in place on Iran. Diplomatic relations between the two countries were broken in April 1980 after the American embassy in Tehran was stormed by students during Iran's Islamic Revolution. Since then the US has imposed successive rounds of sanctions, citing what it says is Iran's support for international terrorism, human rights violations and refusals to co-operate with the IAEA.

The US sanctions prohibit almost all trade with Iran, making some exceptions only for activity "intended to benefit the Iranian people", including the export of medical and agricultural equipment to Iran, sending humanitarian assistance and trade in "informational" materials such as films and publications.

In late November the US, UK and Canada announced more bilateral sanctions to be placed on Iran, in reaction to an IAEA report which suggested Iran's nuclear programme may have a military purpose. The US expanded sanctions to target companies that aid Iran's oil and petrochemical industries, while the UK ordered all British financial institutions to stop doing business with their Iranian counterparts, including the Iranian central bank.

Several other countries including Switzerland, Japan, Australia and Canada have also imposed bilateral sanctions on Iran in recent years in response to Iran's lack of co-operation with the IAEA.

Could further measures be taken?

One step which is thought to be under consideration is placing an embargo on Iranian oil sales, as the EU recently did with regard to Syria. Some members of the US Congress are sponsoring legislation urging President Obama to target Iran's central bank and any foreign institutions that do business with it, potentially reducing the flow of oil revenue to Iran and causing a drop in its oil exports. The US Treasury has expressed its readiness to consider such measures.

This would have a big impact on the Iranian economy, but given Iran's position as a major global oil exporter, an embargo could also have the consequence of driving up the global oil price and harming Western economies, in Europe in particular.

Which countries are opposed to sanctions on Iran?

Russia and China have expressed their opposition to further sanctions on Iran, making more measures at the UN Security Council highly unlikely, as both countries have a veto there.

Russia's Foreign Ministry has criticised the IAEA report that has sparked the latest row and said the imposition of bilateral sanctions is "fraught with the gravest consequences".

China and Russia have been expanding their roles in Iran's economy in recent years - China is currently the largest buyer of Iranian crude oil.

US presence

The Strait of Hormuz links the Gulf - and the oil-producing states of Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - to the Indian Ocean. About 40% of the world's tanker-borne oil passes through it.

Map locatorThe US maintains a naval presence in the Gulf, largely to ensure the transport of oil remains open.

Washington played down the Iranian threat.

US State Department deputy spokesman Mark Toner said: "I just think it's another attempt by them to distract attention from the real issue, which is their continued non-compliance with their international nuclear obligations."

Iran's navy has been staging wargames in international waters to the east of the strait.

Adm Sayari said the manoeuvres were designed to show Gulf neighbours the power of Iran's military over the zone.

Washington and Israel have not ruled out military action against Iran's nuclear facilities if sanctions and diplomacy fail.

Iran has vowed to respond by attacking Israeli and US interests in the region.

An embargo on Iranian oil exports has been considered before but dismissed as it could also drive up global oil prices and harm Western economies, particularly in Europe.

It is believed the new measures could cut Tehran off from global energy markets without raising the price of fuel.

The UN has ratified four rounds of sanctions against Iran over its failure to halt uranium enrichment and co-operate with the International Atomic Energy Agency (IAEA).

BBC © 2011

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