Strait History: Iran’s Options

by , July 06, 2012

George Santayana wisely said: “Those who cannot remember the past are condemned to repeat it.” Oblivious to history and its lessons, the United States and its Western allies are repeating their actions from the 1950s by imposing an oil embargo on Iran. The U.S.-led alliance has forgotten the past.

Iran remembers.

When, under the leadership of the nationalist Mohammad Mossadegh, Iran opted to nationalize its oil industry, the British Royal Navy blocked Iran’s oil exports to forcefully prevent it from nationalizing its oil. In retaliation for Iran’s nationalistic ambitions, and to punish Iran for pursuing its national interests, the British instigated a worldwide boycott of Iranian oil.

In the 1950s, Iran did not have the military might to retaliate against the oil embargo, and the naval blockade was aimed at crushing the economy in order to bring about regime change. The subsequent events are described in a New York Times article as a “lesson in the heavy cost that must be paid” when an oil-rich Third World nation “goes berserk with fanatical nationalism.” Iran learned that sovereignty and nationalism necessitate tactical/military strength and determination.

Not heeding the aftermath of the 1950s, the American-led Western allies have once again imposed an oil embargo on Iran. In retaliation, Iran has drafted a bill to stop the flow of oil through its territorial waters, the Strait of Hormuz, to countries that have imposed sanctions against it. This bill is not without merit, and unlike during the previous oil embargo, it appears that Tehran has the upper hand and the heavy cost associated with the embargo will not be borne by Iran alone.

Iran’s Legal Standing

The 1982 United Nations Convention on the Law of the Sea stipulates that vessels can exercise the right of innocent passage and coastal states should not impede their passage. Although Iran has signed the treaty, the treaty was not ratified and as such it has no legal standing. However, even if one overlooks the nonbinding signature, under the UNCLOS framework of international law, a coastal state can block ships from entering its territorial waters if the passage of the ships harms the “peace, good order, or security” of said state, as the passage of such ships would no longer be deemed “innocent.”

Even if Iran simply chooses to merely delay the passage of tankers by exercising its right to inspect every oil tanker that passes through the Strait of Hormuz, these inspections and subsequent delays will maintain or contribute to higher oil prices. While higher oil prices will benefit Iran and other oil-producing countries, they will further destabilize the European economy, which is already in crisis.

The Military Option

Although U.S.-led Western allies are flexing their muscles by sending battleships to the Persian Gulf, Washington’s own war game exercise, the Millennium Challenge 2002 (with a price tag of $250 million), underscored its inability to defeat Iran. Oblivious to the lesson of its own making, by sending more warships to the Persian Gulf the U.S. is inching toward a full-scale conflict. The inherent danger from a naval buildup is that, unlike during the Cuban Missile Crisis, the forces in the Persian Gulf are not confined to two leaders who would be able to communicate to stop a runaway situation. Nor would the consequences of such a potential conflict be limited to the region.

Given that 17 million barrels of oil a day, or 35% of the world’s seaborne oil exports, go through the Strait of Hormuz, incidents in the Strait would be fatal for the world economy. While only 1.1 million barrels per day go to the U.S., a significant amount of this oil is destined for Europe. One must ask why the U.S. demands that its “European allies” act contrary to their own national interests, pay a higher price for oil by boycotting Iran’s exports, and increase the risk of Iran blocking the passage of other oil tankers destined for them.

Again, history has a straight answer. Contrary to conventional wisdom about oil producing-countries, it is the U.S. that has used oil as a weapon. Some examples include the pressure Washington put on Britain in the 1920s to share its oil concessions in the Middle East with U.S. companies. After World War II, the U.S. violated the terms of the 1928 Red Line Agreement, freezing the British and the French out of the agreement.

In 1956, the U.S. made it clear to Britain and France that no oil would be sent to Western Europe unless the two countries agreed to a rapid withdrawal from Egypt. The U.S. was not opposed to the overthrow of Egyptian President Gamal Abdel Nasser, but President Dwight. D. Eisenhower said: “Had they done it quickly, we would have accepted it.”

It is possible that the leaders of Western European countries are beholden to special interest groups such as pro-Israel lobbies, as the U.S. is. Or they may believe that Iran will not call their bluff by ratifying the bill passed by the Majlis and that oil will be delivered unhindered. Either way, they are committing financial suicide and may well suffer serious consequences before Iran’s resolve is shaken.

Read more by Soraya Sepahpour-Ulrich