WarSclerotic

(Birds of a feather… – JW)

Ahmadinejad to seek help in Latin Americ… JPost – International.

    TEHRAN/CARACAS – Iranian President Mahmoud Ahmadinejad will seek support from Latin America’s leftist leaders on a tour starting on Sunday after tough new Western sanctions targeted Iran’s oil industry.

With one eye on his standing at home ahead of March’s parliamentary election, Ahmadinejad will meet other anti-American presidents on a trip Washington said showed Iran was “desperate for friends”.
His first stop is OPEC-ally Venezuela, where Ahmadinejad has been assured a warm welcome by President Hugo Chavez. He will also visit Cuba and Ecuador and attend the inauguration of re-elected Nicaraguan President Daniel Ortega.

“We are making absolutely clear to countries around the world that now is not the time to be deepening ties, not security ties, not economic ties, with Iran,” US State Department spokeswoman Victoria Nuland said on Friday.

“As the regime feels increasing pressure, it is desperate for friends and flailing around in interesting places to find new friends,” Nuland said.

US President Barack Obama signed new measures into law on New Year’s Eve that will make it harder for most countries to buy Iranian oil. The European Union is expected to announce some form of ban on Iranian oil by the end of the month.

The sanctions are aimed at forcing Iran to halt its nuclear work, which the United States and its allies say is aimed at producing bombs. Iran says it is for power generation only.

The sanctions are already hurting Iranians. Faced with rising prices and a falling rial currency, they have been queuing at banks to convert savings into dollars.

“The representative of the dignified people of Iran will be welcome,” Chavez said last week as Iranian naval exercises helped push up global oil prices.

But it remains to be seen how far Chavez would go in backing Iran’s threat to close the Strait of Hormuz, the world’s most important oil shipping lane, or how much he could undermine the sanctions by providing fuel or cash to the Islamic Republic.

Other regional leaders due to receive Ahmadinejad, such as Ortega and Ecuador’s Rafael Correa, have a similar ideological stance to Chavez but fewer resources available to help Iran.

Ahmadinejad, who is subordinate to Supreme Leader Ayatollah Ali Khamenei on foreign policy, has said little about the spike in tensions with the West, leaving it to military commanders to make the most bellicose statements.

Under increasing fire from rival hardliners aiming to stop his supporters making gains in the March election, Ahmadinejad will hope the foreign tour will show voters he still has international clout and is not, as his critics say, a lame duck.

With less than 18 months left of his presidency, he will be keen to preserve his legacy as a leader who stood up to Washington in a changing Middle East.

Ayalon: Iran very vulnerable to s… JPost – Diplomacy & Politics.

    Deputy Foreign Minister Danny Ayalon said Saturday that the Iranian economy is very susceptible to sanctions. “Iran is a very vulnerable country and we can hurt it by by imposing tough economic sanctions. We can use this option as a viable alternative to a military strike.”

In late December, Iran threatened to block the strait if sanctions are imposed on its crude-oil exports. Europe and the United States have stepped up sanctions the Islamic republic in recent weeks in an attempt to force it to abandon its nuclear program.
The Western action has already hit Iran’s rial currency, which fell by 40 percent against the dollar in the past month. It recently recovered 20% of its value through intervention by Iran’s Central Bank.

Speaking at a conference in Beersheba, Ayalon added that Iran will be hurt further in the event that Syria’s Bashar Assad falls. “I do no think that Assad will vanish in the near future. But it is clear that whoever replaces him will be preferable to the current regime. Iran will be hurt very much by the fall of Bashar Assad.”

Turning to Egypt, Ayalon repeated the assessment that the peace treaty between Israel and Egypt is not in danger, and that it is in the best interest of the Islamists to maintain relations with the Jewish State.

The Muslim Brotherhood recently assured the United States that it will not break the Egyptian-Israeli peace treaty despite public statements to the contrary.

“We have had other assurances from the party with regard to their commitment not only to universal human rights, but to the international obligations that the Government of Egypt has undertaken,” US State Department Spokesperson Victoria Nuland said Thursday in a briefing.

Ayalon also discussed the Saudi hacker that infiltrated numerous Israeli websites and published personal information and credit card numbers online. “We will hit whoever hurts or tries to hurt Israel, including within the cyber realm. We have to first discover whether this was the work of an individual or whether it was an organized attack.”


“The United States has officially stated that any attack on its computer systems is a declaration of war and the country will respond appropriately, including with missile fire if necessary.  Israel should learn from the US example,” said Ayalon.

The hacker that published almost 11,000 new Israeli credit card numbers and personal contact details to the public on Thursday, following the release of around 15,000 numbers earlier this week.

Jpost.com staff contributed to this report.

Iran Hails U.S. Rescue Of Sailors As ‘Humanitarian And Positive’ Act | Fox News.

War Clouds Multiply Over Middle East: Israel Update for December 2011.

Israel Update for December 2011

David Dolan

The already tense Middle East raced closer to a major conflict in December as news reports said Iran is probably on the brink of building a nuclear warhead. This news came after Iran intercepted an American intelligence spy drone that was reportedly gathering real time intelligence information on Iran’s burgeoning nuclear facilities. In Washington, the US Defense Secretary declared that the Obama Administration might be forced to take military action to halt Iran’s nuclear weapons programme. Israeli officials continued to warn that they would have little choice but to launch an attack upon the extremist Iranian regime’s nuclear production facilities if no one else-meaning the United States and/or possibly Great Britain or France-takes military action to thwart Iran’s nuclear ambitions. Saudi Arabian leaders held urgent consultations with their regional Arab counterparts as the race toward a new Middle East conflict gained steam.

Near the end of the month, Iranian leaders threatened once again to halt all oil shipments out of the Straight of Hormuz, even though this would further harm Iran’s own weak economy. The oil rich country ships most of its crude by sea via the strategic outlet, much of it headed to China. The Straight of Hormuz is bordered on the north by Iran and on the south by the United Arab Emirates. The United States said that the threatened Iranian closure would be “intolerable” and warned Tehran that it would provoke an international military response. Iran held major war exercises near the Persian Gulf outlet in late December, prompting the United States to send an aircraft carrier and its support ships into the area. Iranian leaders characterized the action as a deliberate attempt to ratchet up tensions in the region-as if Iran’s militant moves and war threats were not what prompted the relatively timid Obama Administration to react in such an unusually strong fashion.

Meanwhile copious amounts of blood continued to run onto the streets of Iran’s closest regional ally, Syria, as the uprising there became more pronounced during December. This came as the Arab League tried to calm the situation by sending monitors to help insure that more Syrian Sunni Muslim protestors were not slaughtered by the brutal Assad regime. However the move did not halt the deadly bloodshed. The number of defectors from Syrian army and police forces continued to grow during the month, producing an upsurge in highly organized armed assaults upon the regime’s security forces led by some of the former military and police commanders. Syrian opposition leaders said a major massacre took place in the middle of December when Syrian army forces opened fire at close range on around 70 Syrian army deserters in the northwestern province of Idlib, killing all of them.

Russian leaders faced charges of vote fraud at home while reinforcing their military protection of the embattled Syrian Assad family regime. Arab news reports said that Moscow sent advanced shore to sea missiles to Damascus to fend off a possible NATO naval attack along Syria’s western Mediterranean coast. A Russian naval strike force was also stationed off of the Syrian coast in what analysts said was a clear message to officials in Washington, London and Paris not to intervene in the Syrian crisis. This came as the Kremlin shipped some three million protective gas masks to Syria, which were reportedly distributed mainly to loyal members and supporters of the barbaric Syrian regime. Israeli analysts said the ominous move might indicate that besieged Syrian dictator Bashar Assad and his cronies are prepared to deploy such non-conventional weapons against any foreign forces trying to halt the internal bloodshed that left tens of thousands of Syrians either dead or wounded during 2011. Soon after the gas masks arrived at Damascus international airport, the Syrian Vice President flew to Moscow to hold urgent consultations with Russian governmental leaders.

Israeli media reports said NATO member Turkey’s armed forces were placed on a full war footing during the month. This came as senior American officials held urgent consultation with their Turkish counterparts over the deteriorating regional situation. Meanwhile press reports revealed that controversial Turkish Prime Minister Tayyip Erdogan is undergoing medical treatment for cancer, although it is not thought to be life threatening at this point. Despite the rift in diplomatic relations between Israel and Turkey provoked by Edogan’s nearly endless verbal blasts against the Jewish state in recent years, indications are growing that the pro-western Turkish military will stand with Israel and its allies if any military attack is launched against Iran’s nuclear facilities, especially if such dramatic action directly involves the United States.

Israeli leaders and the general public have been discussing the growing role that the Middle East crisis has been playing in the prolonged American Republican Party presidential race. In particular, controversial comments by Texas Congressman Ron Paul saying that Iran’s nuclear ambitions pose no threat to Israel and the world made headlines in Israel. A later statement by a former top aid to the Republican candidate maintaining that Congressman Paul is anti-semitic and wants to see Israel erased from the regional map were naturally widely reported in Israel as well. The prospect that America’s next president might be a practicing Mormon has also gained attention in Israel. The powerful and wealthy Salt Lake-based religious group runs an extension college campus located just above Jerusalem’s ancient walled Old City.

Nuclear Bomb On The Way?

Israeli media outlets reported the third week of December that an unnamed senior American official had told their Israeli counterparts that they have obtained hard evidence that Iran has embarked on what were termed “activities related to possible nuclear weaponization.” If so, this would be crossing the important red line that the Obama administration has publicly laid down as impassable for the Shiite Islamic regime, which frequently vows to destroy Israel. The unidentified US official reportedly added that the “activities” could leave Iran with a nuclear warhead in a relatively short period of time. Media reports have quoted Israeli intelligence agents as predicting that such a bomb could be ready for deployment sometime later this year.

The ominous media reports about a possible pending nuclear weapon in Iranian hands came as new American Secretary of State Leon Panetta said that the US may be forced to take military action if Iran actually begins producing nuclear weapons. “If they proceed, and we get intelligence that they’re proceeding in developing a nuclear weapon, then we will take whatever steps are necessary to stop it,” Panetta said in a televised interview he gave to CBS News. The comments-the clearest yet by a high level US government official indicating that the Americans themselves might be forced to react militarily to such a development-were subsequently reinforced by the Chairman of the Joint US Chiefs of Staff, General Martin Dempsey, indicating that the American military establishment is ready to take action against Iran if that dramatic move is deemed necessary by the Obama administration.

Citing intelligence reports, Secretary of Defense Panetta added that, “it would be some time in around a year” when the Iranian regime would be technically able to build a nuclear weapon. However, he issued a caveat by echoing some Israeli officials who have suggested it might be possible for Iran to construct such a weapon in far less time. Panetta admitted that was a possibility, saying the potential timeline might depend on whether or not Iran has an unknown hidden nuclear facility located somewhere in the country, as some Israeli leaders say they suspect is indeed the case. Officials at the Pentagon later clarified that the US would quickly know if a final decision to build a bomb had been taken by the Iranian regime since international nuclear inspectors who regularly visit the Shiite Muslim country would detect that its centrifuges were enriching uranium up to weapons-grade levels.

Iran Captures US Spy Drone

American government officials reluctantly admitted in early December that Iran had taken possession of a highly sophisticated US stealth drone aircraft that was apparently in the middle of an information gathering flight over Iranian territory when it was intercepted. The US initially claimed that the drone had fallen into Iranian hands due to a “technical malfunction” on board. However according to an Iranian engineer who was interviewed by the American Christian Science Monitor newspaper later in the month, Iran was able to hack into the spy drone’s GPS navigational system in order to redirect it to land at an Iranian air base. If so (and most experts said this was probably the case), an electronic interception would be an extremely serious development that demonstrated Iran might be a more formidable opponent than previously anticipated if a full blown war develops as a result of any attack upon Iran’s nuclear facilities.

Known as the RQ-170 Sentinel, the pilot-less aircraft was subsequently closely inspected by Iranian officials. US defense experts said it was highly likely that Iran will share whatever information it gleans from the inspections with its Chinese allies, and possibly also with Russia as well. The Sentinel drones have been heavily deployed in recent years in Afghanistan, Pakistan and in Iraq, which is now empty of US ground forces after the last American soldiers were pulled out in December.

According to the report relayed by the Iranian engineer, Iranian specialists somehow figured out that the RQ-170 Sentinels weakest point is its GPS. They apparently acquired this vital information by examining previously downed American drones in September. “By putting noise (i.e. jamming) on the communications, you force the bird into auto-pilot. This is where the bird loses its brain,” the engineer told the American newspaper. He maintained that the Iranian scientific team then simply programmed the drone to “land on its own where they wanted it to.” American defense experts said the Pentagon has known since 2003 that the GPS system on the high flying drones is vulnerable to outside manipulation. The intercepted Sentinel’s base was reportedly in next door Afghanistan. Earlier last year, an entire fleet of drones was infected by a computer virus, while two years ago, live drone video transmissions to American ground communications stations were successfully intercepted by Iraqi insurgents.

Israeli media reports said that the captured drone was one of the subjects discussed between American President Barrack Obama and visiting Israeli Defense Minister Ehud Barak when they met at Camp David in Maryland the middle of December. However the main focus was said to be the evidence mentioned by the unnamed senior American source indicating Iran has actually begun to assemble a nuclear bomb, or is at least on the verge of doing so. Also indicating that stepped up discussions about the situation in Iran and the region are now underway, a series of mid-level American officials paraded to Israel the second half of the month, including Lt. General Frank Gorenc, who commands a wing of the US Air Force. Media reports said he had come to the region to organize one of the largest ever shared military exercises between the United States and Israel. Secretary of State Hillary Clinton’s main lieutenant, Wendy Sherman, also traveled unexpectedly to Jerusalem in December, as did Robert Einhorn, the State Department’s expert on nuclear weapons and nonproliferation issues. The two diplomats reportedly flew to Israel in order to “tie up” some strings dangling from the President’s earlier meeting with Ehud Barak.
The situation in Iran was also thought to be a major topic when Secretary of Defense Leon Panetta flew to Ankara to meet with Turkish leaders during the month. This came amid Israeli press reports that Turkey’s troops had been placed on full war footing in order to deal with the possible spillover effects of any action in Iran and with the deteriorating situation in Syria, located due south of Turkey. Middle East military analysts say they expect that Turkish air bases would probably be used as a base of operations if American warplanes are ordered by the Obama administration to attack Iran’s nuclear production facilities.

Iran Holds Major War Exercises

Iranian military units began what was billed as a ten day war drill on the last day of December. Iranian Admiral Mahmoud Mousavi told the Iranian FARS news agency that the exercises will end with the test firing of long range missiles that are capable of hitting many regional countries, including Israel. “The firing of missiles is the final part of the navy drill,” said Mousavi, adding that, “The final phase of the drill is to prepare the navy for confronting the enemy in war situations.” The drill came just a couple weeks after Iranian leaders threatened to shut down all international oil shipments through the Straight of Hormuz, through which about 40% of the world’s oil supplies passes each day. Experts say it would be relatively easy to chock off the pass by simply sinking a couple of the dozens of large oil tankers that transit the narrow Persian Gulf outlet each day. The heavy tankers travel along narrow channels that were long ago dug into the fairly shallow waterway to accommodate them. Since Iran has major naval and ground forces in the area, it should be theoretically easy for Iranian military forces to keep rescue crews from removing any seriously damaged petroleum vessels. America’s main regional naval base is in nearby Bahrain, meaning its ships also need to transit the passageway when leaving Gulf waters.

Israeli leaders again publicly called on the international community to band together in order to deal with the Iranian nuclear production programme. IDF Chief of General Staff Lt.-Gen. Benny Gantz told Knesset members in late December that the Iranian threat can be neutralized if both Israel and the international community take what he called “a responsible stance” on the explosive issue. He added, “Iran is working on a nuclear programme for its military. This warrants concern from us, but the threat is not only directed towards Israel. The countries in our immediate proximity, and indeed beyond, are all at risk.”

Grantz also took the opportunity to warn Palestinian Hamas leaders that a major IDF ground operation might be unleashed if frequent rocket firings from the Gaza Strip at Israeli targets does not quickly cease and desist. As during most of 2011, a series of Kassam rockets landed inside Israeli territory during December, some striking the cities of Beersheva and Ashkelon. This followed the firing of three rockets the end of November at northern Israel from southern Lebanon. Allied with Hamas, the Shiite Lebanese Hizbullah militia denied that its forces had been involved. The Lebanese Defense Minister actually claimed in late December that Israel itself had fired the rockets at its own soil in order to stir up tensions in Lebanon. His highly unusual contention was deemed totally absurd by officials in Jerusalem.

US Jets For Saudi Arabia

Among other Middle East countries that have expressed grave concern about Iran’s actions and intentions is the oil-rich nation of Saudi Arabia. Saudi King Abdullah held a series of urgent consultations with other regional Arab leaders during December as additional war clouds gathered in the area. This came as the Obama administration finalized the sale of 84 advanced F-15 combat jets to Saudi Arabia. The huge transaction, approved by Congress after it was first proposed in 2010, is worth 30 billion US dollars. The combat jets are produced by the American Boeing aircraft conglomerate.
John Earnest, the deputy White House press secretary, said the large weapons sale “will positively impact the U.S. economy, and further advances the President’s commitment to create jobs by increasing exports.” According to industry experts, this agreement will support more than 50,000 American jobs, engaging 600 suppliers in 44 states and providing $3.5 billion in annual economic impact to the U.S. economy.” Along with the F-15s, the package includes the supply of 70 Apache attack helicopters and 72 Black Hawk choppers. Israeli officials have not publicly opposed the weapons transfers, although they reportedly continue to worry that the advanced aircraft might eventually be used in a future Islamic war against the small Jewish State.

Arab Monitors In Syria

As domestic upheaval continued to rock the Arab country of Syria, Israeli Defense Minister Barak told the Knesset Foreign Affairs and Intelligence Committee on January 2 that Syrian dictator Bashar Assad will be toppled from power within a few weeks time. The veteran Israeli political leader and former armed forces chief said that the increasing defection of thousands of Syrian military personnel to the increasingly powerful anti-government opposition spells the end of the Assad family dynasty which has ruled Syria for since the 1970s. Barak added that anarchy will probably follow the overthrow of the brutal regime, warning this could easily spill over into the Israeli-ruled Golan Heights, which was captured by IDF forces from Syria during the 1967 Six Day War. He confirmed press reports that Iran and Hizbullah have both been aiding the Assad regime in its fight to remain in power, which cost the lives of over 5,000 Syrians during 2011, most of them opposition protestors.

After imposing economic sanctions on the Assad regime, the Arab League was reluctantly allowed by it to send monitors into the troubled country in December. Arab League Secretary General Nabil Elaraby said the monitors would remain in place for the time being in an effort to halt the fierce attacks upon anti-regime protestors, who are mainly Sunni Muslims as are most Arab League member states. In another major concession that began in late December, Bashar Assad ordered his security forces to retreat from most of his country’s besieged cities and towns, where street battles have raged since last March. However press reports revealed that military forces were merely moved to the outskirts of the cities and towns, and therefore could be easily moved back into urban areas very quickly.

Meanwhile, a web site linked to the Assad regime called the Damas Post reported in early January that the Syrian dictator will soon announce his intention to form a new government which will include prominent members of the opposition. The report added that Assad was briefed by senior government negotiators who are quietly meeting with leading members of the anti-government Sunni opposition. This came as Assad continued to publicly justify his army’s repressive actions, which have been widely condemned in most Arab countries and elsewhere around the world.

Russian leaders expanded their military support for the embattled Assad regime during December, sending a naval strike force to dock at the Syrian seaport of Tartus. This came after the Kremlin reportedly rushed over 70 shore to sea Yakhont SSN-26 missiles to Damascus. The missiles have been deployed along the Syrian Mediterranean coast where the Assad regime is keeping a wary eye on American, British and other NATO naval forces that regularly patrol the international waterway between Cyprus and Syria. Both the United States and the European Union have called upon Assad to quickly step down from power. Israeli media outlets said the delivery by the Kremlin in December of over three million protective face masks to Syria was raising new concern in Jerusalem. Syria is known to possess one of the world’s largest chemical weapons stockpiles, initially developed with the active aid of the Communist Soviet Union in the 1970s. Bashar Assad has hinted at the possible use of such perilous weapons in the past. Syrian Vice President Farouk Al-Shara flew to Moscow for crisis consultations soon after the naval strike force arrived at Tartus, apparently in an attempt to seek more aid to help keep the repressive regime in power.

With the Middle East spinning around like a Hannukah dreidel in motion, the year ahead looks likely to be one of the most dramatic ones ever experienced in the tumultuous region. This apparent reality should give us all a renewed mandate to obey King David’s ancient admonition to “Pray for the peace of Jerusalem,” knowing that the Eternal One will “prosper all who love her” (Psalm 122:6).

U.S. warns Latin America against tying itself to Iran – Haaretz Daily Newspaper | Israel News.

State Department spokeswoman says Iranian regime is reaching out for friends as it comes under increased international pressure over its nuclear program; Ahmadinejad to set out for five-day tour to Nicaragua, Cuba and Ecuador.

By DPA

The United States on Friday urged Latin American countries not to strengthen ties with Iran as President Mahmoud Ahmadinejad prepares to visit the region.

State Department spokeswoman Victoria Nuland told reporters that the Iranian regime is reaching out for friends as it comes under increased international pressure over its nuclear program.

	Iranian President Mahmoud Ahmadinejad.
	Photo by: AP

“We are making absolutely clear to countries around the world that now is not the time to be deepening ties, not security ties, not economic ties, with Iran,” she said.

She said instead it was time for Iran to begin complying with international obligations.

Ahmadinejad is expected Sunday in Caracas at the start of a five-day tour which will take him to Nicaragua Tuesday and then on to Cuba and Ecuador.

Experts noted that Iran is reaching out to Latin America, in particular the left-leaning countries within the region, in an effort to side-step economic sanctions and find new markets.

In recent weeks, Tehran has threatened to block the Strait of Hormuz, where some 35 per cent of the world’s seaborne oil passes, if the West imposes new sanctions in reaction to Iran’s disputed nuclear program.

Qatar says Syria protocol not being implem… JPost – Middle East.

    CAIRO – Syria is not implementing a deal with the Arab League aimed at halting violence in the country, the prime minister of Qatar said on Friday, adding that Arab League monitors could not stay there to “waste time.”

The Syrian army, required to pull of Syrian cities according to the deal, had not withdrawn, Sheikh Hamad bin Jassim al-Thani said. He added there had been no end to killing during the 10 days spent in Syria by the Arab monitors.
“With great regret, the news is not good,” Sheikh Hamad told Al Jazeera television.

An Arab League committee is due on Sunday to discuss an initial report by the Arab observers who are checking Syria’s compliance with the plan to halt Syrian President Bashar Assad’s crackdown on nearly 10 months of unrest.

“We will listen to the report of the mission and then the Arab committee which will decide what we will do,” Sheikh Hamad said. “We cannot be there to waste time while the killing is continuing,” he added.

The monitors began work on the streets on Dec. 26 to try to verify whether the government was keeping its promise to pull troops and tanks out of cities and free thousands of detainees.

Sheikh Hamad said the observers had been sent after Syria had signed the protocol to monitor implementation. “Unfortunately, nothing has been implemented,” he said.

Report: Global economy could endure disaster… JPost – Headlines.

By REUTERS
01/06/2012 04:43

    LONDON – The global economy could withstand widespread disruption from a major natural disaster or attack by militants for only a week, a report by UK-based think-tank Chatham House said on Friday.

The frequency of natural disasters, such as extreme weather events, appears to be increasing and globalisation has increased their impact, the report found.

Events such as the 2010 volcanic ash cloud, which grounded flights in Europe, Japan’s earthquake and tsunami and Thailand’s floods last year, showed that key sectors and businesses can be severely affected if disruption to production or transport goes on for more than a week.

“One week seems to be the maximum tolerance of the ‘just-in-time’ global economy,” Chatham House said.

The world’s economy is currently fragile, leaving it particularly vulnerable to unforeseen shocks. Up to 30 percent of developed countries’ gross domestic product could be directly threatened by crises, especially in the manufacturing and tourism sectors, it said.

Amb. Marc Ginsberg: Gunboat Diplomacy: A Maritime Field Guide to the Straits of Hormuz Crisis.

You may be about to feel more pain at the pump courtesy of the atomic ayatollahs’ latest gunboat diplomacy to counter the impact of the November 8 IAEA report revealing the extent of Iran’s nuclear bomb making ambitions.

To guide you through the growing crisis, here is my Maritime Field Guide to all things “Hormuz.”

Tehran is actually using one of its last trump cards to undertake the naval equivalent of a “Hail Mary Pass” to thwart tightening economic sanctions against it. Late December ’11, Iran’s Naval Commander Habibollah Sayyari issued yet another in a long line of Iranian threats to torpedo oil traffic through the strategic Straits of Hormuz if the European Union keeps to its plan to stop importing Iranian oil (Iran accounts for 8.5% of oil imported by the EU). To add more flair to the threat, for the past ten days Iran has been flaunting its military might in the Persian Gulf during Velyat 90 naval exercises which included a test fire of a new surface-to-surface anti-ship cruise missile termed the “Ghader” (“Capable” in Farsi) and a surface-to-air missile dubbed the “Mehrab” (“Altar” in Farsi) .

Just as Tehran hoped, the sabre-rattling accompanied by souped-up videos of the exercises spiked world oil prices to over $114 a barrel for a few days (“…easier than drinking water from a glass,” proclaimed the boastful Habibollah). Then just to ratchet up the temperature higher Iran’s official news agency blustered that its parliament would take up legislation to prevent American warships from traversing the Straits following a warning from Iran’s Revolutionary Guards Commander that Iran would prevent the USS John C. Stennis — one of the 5th Fleet’s aircraft carriers, from returning to the Persian Gulf.

Is Iran bluffing? Hard to tell. No matter the cost to its own oil exports revenue, Tehran may be calculating that a limited shooting war in the Straits would wreak such economic havoc on world oil prices that the global impact would thwart designs by either the U.S. or Israel to attack its nuclear installations given the predicted outcry as prices skyrocket at the pump.

1. The Skinny on the Straits

Approximately 35% of world oil supplies pass through the 34 mile wide waterway each day (16.5 million barrels loaded on about 15 supertankers departing from Iraq, Kuwait, Saudi Arabia and Iran). Technically, ships must enter the waters near Iran and Oman to traverse the Straits lying between the Persian Gulf and the Arabian Sea. The passage has two north-south shipping lanes to separate northbound and southbound tanker traffic, even though there has been the occasional collision. The Straits derive their name from the Persian God Hormoz.

2. Tanker Wars & Ongoing Confrontations

During the Iran-Iraq War (1984-1988), each side attacked the other’s oil installations and tanker traffic in the Persian Gulf, reducing oil exports through the Straits by 25%. Neutral oil tankers were also attacked by each of the combatants and the threat to global oil exports from the Gulf became acute, which threatened to bring in all of the other Gulf states into the conflict. The Iranians threatened to choke off the Straits of Hormuz to oil tankers, and even attacked a Saudi tanker in Saudi territorial waters which led to a dog fight between the Saudi and Iranian air forces (the Saudis got the better of the fight). In March, 1987, The U.S. Navy started escorting re-flagged Kuwaiti tankers, and in one engagement Iraq (not Iran) actually severely damaged the USS Stark on May 17, 1987 killing 37 sailors and wounding 21 more. In 1988, the U.S. Navy waged a one-day battle against Iranian naval forces in the Straits in retaliation for the mining of the USS Samuel B. Roberts.

When Iran threatened to block the Straits, the U.S. threatened to declare war against Iran if it dared to do so. The Tanker War resulted in damage to 546 commercial ships and killed 430 merchant marine men.

After the so-called Tanker War, the U.S. and Iran have had at it often in the Straits. In December, 2007 and January, 2008, a game of “chicken” between the 5th Fleet and Iranian naval speedboats broke out when Tehran began menacing U.S. ships in the Persian Gulf, although there were no hostilities as a result.

3. Does Iran Possess the Military Clout to Disrupt Shipping Through the Straits?

There is a big difference between Iran’s ability to disrupt shipping temporarily and its ability to plug the Straits completely for extensive periods of time (nevertheless, the former would still have major economic impact on oil prices as well as shipping insurance costs).

Keeping the Straits open in the face of a concerted Iranian attack would be no cakewalk. Iran, with a coast line of 1,300 miles littoral to the Straits, has dramatically increased its naval assets around the Straits to counter the U.S. 5th Fleet. It has a major naval base and its key submarine base near the Straits. Iran also possesses thousands of sea mines, wake homing torpedoes, the aforementioned cruise missiles, and possibly more than a thousand small Zolfaqar speedboat Fast Attack Craft and Fast Inshore Attack Craft which can reach 80 mph, which already carries the Nasr anti-ship missile. Iran already possesses armed drones and mobile shore-based missile batteries ringing the area around the Straits. Iran’s are also masters of the suicide naval and air mission. In other words, it has the means to make life miserable in the strategic waterway.

4. And That Price of Oil?

If Iran (which itself exports 2 million barrels a day through it and derives 85% of its hard currency) were to block the Straits, the price of world oil would likely rise $50 a barrel (to over $150 a barrel based on today’s Brent crude baseline prices), pushing the price of a gallon of unleaded regular gas well over $4 in no time. This is so even though 85% of the oil and natural gas that flows through the Straits goes to China, Japan, India, and South Korea. Increased shipping insurance premiums would keep those elevated oil prices even higher. With Libyan crude exports beginning to reach the market and promised increased in Saudi oil exports to cushion the loss of Persian Gulf oil exports, prices may not reach the OMG level, but no one knows for sure. The EU will unveil its phased oil embargo on January 30… stay tuned.

5. What to Do? 

a. Empty posturing or not, Iran’s threat has to be taken seriously and Iran’s unpredictability has to be taken seriously. Iran has no legal claim to the Straits (a recognized international waterway), and there is ample historical precedent for international action to preemptively prevent vital global waterways from arbitrary blockade (e.g, Straits of Tiran circa 1967). While the U.S. has unilateral resort to its 5th Fleet, Iran is itching to pick a fight with Washington to gain world sympathy and there is no good reason to oblige them. Better to form an international flotilla (NATO plus Persian Gulf states) which would be deployed in the Straits ASAP to counter any Iranian moves to block the passageway.

b. Embargo oil distillates to Iran to prevent Iran from refining its crude oil into refined gasoline. True, it is a punishment that will mainly hit its citizens, but no economic sanctions are going to take dinner off the ayatollahs and its time to get the population more riled up against Iran’s leadership.

c. Keep the pressure on by tightening the noose around Tehran’s central Merkazi Bank. This is the financial jugular vein for the regime.

d. Iran’s limited options to prevent more sanctions makes it more likely that it will undertake some type of attack on a third party tanker as a literal “fire across the bow.” The U.S. and its allies should declare publicly ASAP that any so-called “mistaken” attack on a commercial vessel in the region by any of Iran’s forces will accord license for the international community to take preemptive action to station security forces in the Straits to counter any further threats to commercial shipping in the region.

In this game of high stakes international chicken with Tehran, the better diplomacy is to turn the chairs and force the ayatollahs to blink first.

WRAPUP 4-West readies oil stocks release, Iran plans war games | Reuters.

* West may tap stocks if Iran closes Hormuz Strait

* U.S. rescues Iran fishermen held by pirates

* Iran close to enriching uranium under mountain-diplomats

* New sanctions hamper Iran’s oil exports

* U.S. says will keep strait open despite Iranian threats (Recasts with Western plan to draw on IEA stocks)

By Robin Pomeroy and Peg Mackey

TEHRAN/LONDON, Jan 6 (Reuters) – Iran announced on Friday new military exercises in the Strait of Hormuz, but the West has readied plans to use strategic oil stocks to replace almost all Gulf oil lost if Iran blocks the waterway, industry sources and diplomats told Reuters.

They said senior executives of the International Energy Agency (IEA) discussed on Thursday an existing plan to release up to 14 million barrels per day (bpd) of government-owned oil stored in the United States, Europe, Japan and other importers.

This rate of release could be kept up for a month, offsetting most of the 16 million barrels a day of crude passing through the world’s most important shipping lane that could be halted by an Iranian blockade.

Iranian officials have threatened in recent weeks to block the strait if new sanctions imposed by the United States and planned by the European Union, with the aim of discouraging Iran’s nuclear programme, harm Tehran’s oil exports.

Earlier this week Iran said it would take action if the United States sailed an aircraft carrier through the strait, and followed this by announcing new military exercises, shortly after completing 10 days of naval drills in neighbouring seas.

Real Admiral Ali Fadavi, naval commander of the Revolutionary Guards Corps, said the exercises next month would focus directly on the Strait of Hormuz, which leads out of the Gulf and provides the outlet for most oil from the Middle East.

“Today the Islamic Republic of Iran has full domination over the region and controls all movements within it,” Fadavi said in remarks reported by the Fars news agency.

The United States, whose Fifth Fleet based in the area is far more powerful than Iran’s naval forces, says it will ensure the international waters of the strait stay open. Britain said on Thursday that any attempt to close it would be illegal and unsuccessful.

In a brief respite from the rising tension between the two foes, the U.S. navy rescued 13 Iranians held hostage for weeks by pirates who had apparently used their fishing vessel as a “mother ship” for their operations, the Pentagon said on Friday.

The Iranians were freed by the very carrier group that Iran has said should not return to the Gulf.

The captain of the Al Molai expressed his “sincere gratitude” for their rescue by ships of the USS John C. Stennis carrier strike group, and the Iranians were returning home, a U.S. Navy officer with the strike group said.

New financial sanctions signed into law by U.S. President Barack Obama on New Year’s Eve are aimed at making it difficult for most countries to buy Iranian oil. The European Union is expected to announce its own tough measures at end-January.

Most traders believe Iran will still be able to find buyers, at least for now, for its exports of 2.6 million barrels of oil per day (bpd). But it may have to offer steep discounts that reduce the revenue it needs to feed its 74 million people.

The sanctions are already hurting ordinary Iranians, faced with rising prices and a falling rial currency. They have been queuing at banks to convert their savings into dollars.

Iran holds parliamentary elections in two months, the first since a 2009 presidential election that led to nationwide mass street protests, put down by force. However, the Arab Spring has shown the vulnerability of authoritarian governments in the region to protests fuelled by anger over economic hardship.

NUCLEAR PROGRAMME

Diplomatic sources in Vienna said Iran had come closer in recent weeks to starting uranium enrichment deep inside a mountain at a protected site near the holy city of Qom.

Starting production at the Fordow site could make it harder to revive nuclear talks that collapsed a year ago, worsening Iran’s confrontation with the West.

Iran is already refining uranium to a fissile purity of 20 percent – far more than the 3.5 percent level usually required to power nuclear energy plants – above ground at another site.

It is moving this higher-grade enrichment to Fordow in an apparent bid to protect the work more effectively against any enemy attacks. It also plans to sharply boost output capacity.

Washington and its allies say Iran’s nuclear programme is aimed at producing an atomic bomb, and they are imposing the new sanctions to force it to abandon such plans. Iran says the programme is peaceful.

European Union officials say the EU, which collectively buys about 500,000 bpd of Iranian oil, rivalling China as the largest market, has agreed to impose an embargo halting all imports.

EU diplomats said they are discussing how long they will give member countries to halt purchases, with France, Germany and others wanting the ban imposed within three months but Greece favouring a grace period of up to a year.

China has also cut its imports by more than half in January and February while haggling with Tehran over the size of the discount it wants in return for doing business with it.

Turkey, Japan and other big buyers say they are seeking a waiver from the U.S. sanctions.

The new American law allows Obama to give temporary waivers to allies to continue to buy Iranian oil to prevent a price shock, but to receive the permits, countries are meant to show they are reducing trade with Iran.

Iran has put on a brave face over the sanctions. Foreign Minister Ali Akbar Salehi said on Thursday it would “weather the storm”, telling a news conference “Iran, with divine assistance, has always been ready to counter such hostile actions and we are not concerned at all about the sanctions.”

He also said Tehran was interested in resuming negotiations over its nuclear programme with Western powers, a sign it is trying to alleviate the pressure.

Turkey’s visiting foreign minister brought an offer from Catherine Ashton, the EU foreign policy chief who negotiates on behalf of major powers.

Iran has repeatedly offered to restart the nuclear talks that collapsed a year ago but has insisted it will not negotiate over its right to go on enriching uranium. Western countries say talks are pointless unless a halt to enrichment is on the table.

OIL PRICES IN SPOTLIGHT

After years of sanctions that had little impact, Western countries have adopted a far more direct approach in recent months, imposing sanctions that explicitly impact the oil industry that provides 60 percent of Iran’s state revenue.

The new U.S. measures would cut off any institution that deals with the Iranian central bank from the U.S. financial system. If implemented fully, it would make it impossible for most countries’ refineries to buy Iranian crude.

But Washington has to balance its determination to isolate Tehran with concern that driving its oil off markets will raise prices and hurt the fragile global economy. Brent crude futures hovered above $113 a barrel on Friday, up nearly $7 since Obama signed the new sanctions law.

To ease the impact on markets, the new U.S. measures take effect over several months, and the offer of waivers gives countries time to find other suppliers. Saudi Arabia, the world’s biggest oil exporter and a foe of Iran, says it will make up for any supply shortfall.

Traders and analysts believe Iran is unlikely to block the strait. “Neither side wants a war. A lot of this rhetoric is overstated,” said Cliff Kupchan, Iran analyst at Eurasia Group.

If Iran did try to blockade the strait, it would be no match for a U.S. fleet led by the giant supercarrier John C. Stennis, accompanied by a guided-missile cruiser and flotillas of destroyers and submarines.

The Combined Maritime Force protecting Gulf shipping also includes countries such as Britain, France, Canada, Australia and the Gulf Arab states, under the command of a U.S. admiral.

There are other ways in which Iran could provoke a Western response, from missiles within range of U.S. targets in the region, to small boats that could attack a ship near shore, to allied militia in Palestine and Lebanon that can strike Israel. (Additional reporting Dmitry Zhdannikov and Simon Falush in London, Justyna Pawlak in Brussels and Hashem Kalantari in Tehran; Writing by Peter Graff and Tim Pearce; Editing by Jon Boyle)

World News – US: Iran \’flailing\’ for friends in Latin America.

Atta Kenare / AFP – Getty Images

Iranian President Mahmoud Ahmadinejad flashes a victory sign in Tehran on Thursday.

The Obama administration on Friday called Iranian President Mahmoud Ahmadinejad’s Latin American tour a sign of desperation as international sanctions increasingly isolate Tehran over its nuclear program.

The State Department said that Ahmadinejad’s planned visit to Venezuela, Nicaragua, Cuba and Ecuador showed Iran was “desperate for friends” and that “now is not the time to be deepening ties” with Tehran.

Ahmadinejad was scheduled to arrive in Venezuela on Sunday, NBC News reported.

Department spokeswoman Victoria Nuland said the international community should make clear to Iran that it will only grow more isolated if it fails to comply with demands to come clean about its nuclear ambitions.

“As the regime feels increasing pressure, it is desperate for friends and flailing around in interesting places to find new friends,” Nuland said. “We are making absolutely clear to countries around the world that now is not the time to be deepening ties, not security ties, not economic ties, with Iran.”

The Associated Press contributed to this report.