Exclusive: How to be a War Profiteer
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War is coming to the Middle East. When? If the Obama administration’s view of Iran and Syria does not change dramatically the first shots will be fired within months, not years. That war means the children of American citizens will fight in yet another war and the price of gasoline will hit the ceiling. Of course, savvy companies and investors will make a lot of money.
The reason for the coming regional war is well known: Iran’s nuclear weapons program threatens the existence of Israel, a threat Israel cannot and will not tolerate. On top of that, Iran gave Hezbollah, its terrorist army in Lebanon, 45,000 missiles and Syria threatens to “send Israel back to prehistoric times.”
Two of four nations on the State Department’s list of state sponsors of terrorism, Iran and Syria, are bad actors. But the real cause for the coming war is limp-wristed lack of resolve in the Obama administration. The signs? The White House made several hopeful offers to talk and was slapped down by Iran. The response: Try, try again. Syria threatens Israel with annihilation. The response: The State Department plans to restore diplomatic relations and open an embassy in Damascus.
The thugs in Iran and Syria got those appeasement messages, loud and clear.
Exactly how and when the war starts is unknown. What we do know is that if Israel or the U.S. attacks the atomic bomb factories, Iran promises to block the Strait of Hormuz. Is that a serious threat?
The Gulf region holds 70 percent of the planet’s known oil and gas reserves. Through the Strait of Hormuz, the narrow entrance to the Gulf, flows 40 percent of all seaborne oil traded in the world – 17 million barrels a day. In 2006 it was estimated that closing the Strait would cause oil prices to jump by $175 per barrel. Today, that would mean a total of $250 per barrel, a price that would make American gasoline rise to over$10 a gallon. Besides crude oil, heavy munitions and supplies for U.S. forces in Iraq and other countries in the region pass through the Strait. So does grain, ore, perishable goods and thousands of shipping containers. But can Iran really close the Strait? The answer is yes. For a time.
Flanked by Iran and the Sultanate of Oman, the Strait of Hormuz is only 25 miles wide at its narrowest point. In the center is a pair of 2-mile wide “in” and “out” channels and a 2-mile wide buffer zone. Very deep water is closest to the coast of Oman. Because of bottom characteristics, currents, and an alert Omani navy, mining the Strait itself is difficult. But mining Gulf waters inside is much simpler, and for Iran to then combine mining with supporting weaponry is obvious.
Hamid Reza Zakeri is an Iranian defector who has a document, bogus or not, that describes what the Iranian Revolutionary Guard Corps would do to choke traffic through the Strait. First, to avoid discovery and opposition in the closely watched Strait, the IRGC would lay EM-52 and EM-53 mines in interior Gulf waters. These sophisticated mines, sold to Iran by China, threaten even the largest ship, and so can do grave damage to a tanker or an aircraft carrier. Mining the Gulf is an act of war, and Iran will be opposed by all the Gulf States, U.S. forces, and the military establishments of countries dependent on the free flow of oil. War would rapidly ripple outward as Iran made good its threat to attack all the allies of any nation that dares to attack the Shiite homeland.
Israel would be hit by Shahab ICBMs and thousands of Hezbollah rockets. Saudi oil installations would be struck by long range missiles. Hundreds of small boats packed with explosives and piloted by Ashura suicide bombers would swarm over ships in the Gulf. A wave of attacks would also be carried out by suicide-submarines and semi-submersible boats. Then Iran would deploy its Russian KILO class submarines and Chinese Huodong missile boats. Aboard the Huodong is the C-802, a radar-guided sea-skimming cruise missile with a 60-mile range, against which there is no effective defense. Shore artillery and missile batteries would fire on ships stymied by the mine field. And Zakeri’s documents show the IRGC plans to use chemical, biological, and nuclear warheads on their missiles.
But if the White House finds the courage, the response by U.S. forces to Iran’s assault on freedom of navigation in international waters would be ferocious.
B-2 stealth bombers from their Indian Ocean base at Diego Garcia would fly invisibly over Iran, destroying communications, air defenses, and high value targets like enrichment centrifuges. Clouds of fighter aircraft would sortie from Qatar and other regional fields. Aircraft from carrier strike forces would destroy shore installations and naval bases. Cruise missiles fired by American attack submarines would leap out of the ocean and pinpoint vital targets deep inside Iran. Special Forces would appear and disappear after causing havoc on the shore and inland. The Iranian Air Force and Navy would cease to exist in the first 24 hours, and there would be no need for the invasion the IRGC fears so much. The air and sea bombardment would continue until it was safe to clear mines and make the Gulf safe again. Since the U.S. Navy has not been given adequate mine warfare funds, it will likely take months to clear all the mines. Will the oil be stopped for those months? No.
Long before the last mine is found, the greed factor will kick in and a tanker company will run the gauntlet with its overpriced cargo. We saw that in the previous “Tanker War” of 1984-87 when Iran blocked transit with mines. Many ships will make it to riches and a few will not. But eventually a secure path will be opened for all seaborne traffic.
Before that happens, the price of oil will spike to fantastic levels, a chance for shippers and astute investors to cash in. All investors need to know is when the war starts, so as to be able to buy before the spike in prices. Gold is another investment option, since investors seek the safety of gold in times of war and economic distress. It looks like the time to buy oil and gold is now.
At the end of the day, with the war over and with investors holding double or triple their money, the question arises: What to do with the profits? In times when the Euro is dying, when the dollar is in desperate danger from Obama administration spending, and when the stock market meltdown is continuing, the thing to do might be to buy a farm and return to basics. Farms in Europe are getting cheaper by the minute.
But maybe New Zealand is safer.
FamilySecurityMatters.org Contributing editor Chet Nagle is a Naval Academy graduate and Cold War carrier pilot who flew in the Cuban Missile Crisis. After a stint as a navy research officer, he joined International Security Affairs as a Pentagon civilian – then came defense and intelligence work, life abroad for 12 years as an agent for the CIA, and extensive time in Iran, Oman, and many other countries. Along the way, he graduated from the Georgetown University Law School and was the founding publisher of a geo-political magazine, The Journal of Defense & Diplomacy, read in over 20 countries and with a circulation of 26,000. At the end of his work in the Middle East, he was awarded the Order of Oman in that allied nation’s victory over communist Yemen; now, he writes and consults. He and his wife Dorothy live in Virginia.
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