Iran 'rehearses closing gulf oil route'

DUBAI, United Arab Emirates, Dec. 23 (UPI) -- Iranian naval forces launch a massive 10-day exercise Saturday near the Strait of Hormuz, the only way in and out of the Persian Gulf, in what is widely seen as a rehearsal for a threatened closure of the strategic global oil artery if the country is attacked.

The Iranians have billed the Velayat-90 drill as the largest they have conducted. It will involve the Islamic republic's navy, which includes three Russian-built, Kilo class submarines, and the naval wing of the Islamic Revolutionary Guard Corps.

Navy commander Rear Adm. Habibollah Sayari said the exercises will cover an area extending from the eastern end of the horseshoe-shaped strait in the Gulf of Oman, south and west through the Arabian Sea, the major oil route to Asia, to the piracy-plagued Gulf of Aden.

Foreign Ministry spokesman Ramin Mehmanparast said Dec. 14 that closing the strait was "not on the agenda."

But he stressed: "The ability to do so exists … whether to go ahead lies with the regime's top officials."

Two days earlier Parviz Sarvari, a member of the Iranian Parliament's National Security Committee, told the student news agency ISNA: "Soon we will hold military maneuvers on how to close the Strait of Hormuz.

"If the world wants to make the region insecure, we will make the world insecure."

The U.S. Energy Information Administration calls the 112-mile-long strait the most important oil transit channel in the world. Some 15.5 million barrels of oil -- 33 percent of the world's seaborne oil shipments -- pass through the strait every day.

This includes most of the crude exported by Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq, along with virtually all the liquefied natural gas from top exporter Qatar.

The strait is 34 miles wide at its narrowest point. But shipping is funneled through a traffic route 6 miles wide, with two 2-mile lanes, inbound and outbound, separated by a 2-mile-wide median.

The Iranians would be likely to use a combination of sea mines, anti-ship cruise missiles and swarms of small gunboats to close the strait, analysts say.

Sarvari's comments pushed up oil prices by $3 a barrel to more than $100, underlining how sensitive the market is to talk of sealing off Hormuz.

Theodore Karasik of Dubai's Institute for Near East and Gulf Military Analysis says that's chicken feed compared to what would transpire if the strait is closed.

"The consequences are that international shipping, in particular in terms of energy, would grind to a halt," he said.

"This would put immense pressure on the world's economies. You'll see the price of oil skyrocket, probably up to $250 a barrel."

Tension between the West and Iran, triggered by Tehran's alleged drive to produce nuclear weapons, heightened Nov. 8 when the International Atomic Energy Agency, the United Nations' watchdog body, said Iran appeared to have worked on designing a nuclear weapon and may still be doing so. Tehran denies that.

The Iranians, who have repeatedly threatened to close the Strait of Hormuz over the years, face the U.S. 5th Fleet, the most powerful naval force between the Mediterranean Sea and the Pacific Ocean.

Its headquarters are the tiny gulf state of Bahrain.

Velayat-90 is certain to put Iranian warships in close proximity to U.S. and British naval vessels, which patrol the waters in which the Iranians will be exercising.

With tension running high between the United States and Iran over Tehran's nuclear program and stringent international economic sanctions imposed in June 2010, the potential for confrontation has increased.

The Americans are considering imposing further sanctions aimed at choking off Iran's vital oil exports and its petrochemical industry.

This move comes amid a sharp increase in Israeli media speculation that Israeli Prime Minister Binyamin Netanyahu's right-wing government will unleash unilateral pre-emptive military strikes against Iran.

The United Arab Emirates is completing a pipeline from its oil fields to Fujairah on the Gulf of Oman that bypasses the chokepoint strait. The 230-mile pipeline is part of a strategic effort by the gulf Arab states to ensure global oil supplies if hostilities erupt with Iran.

The pipeline will have an initial capacity will be 1.5 million barrels a day. But that's only a fraction of the region's seaborne oil exports.